Protection Or Free Trade

PROTECTION OR FREE TRADE

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PROTECTION OR
FREE TRADE

AN EXAMINATION OF THE TARIFF

QUESTION, WITH ESPECIAL REGARD

TO THE INTERESTS OF LABOR

BY
HENRY GEORGE

Author of

"The Science of Political Economy," "Social Problems/ 1

"Progress and Poverty" "A Perplexed Philosopher,"

" The Condition of Labor," " The Land Question,"

"Property in Land" etc.

ROBERT SCHALKENBACH FOUNDATION
11 PARK PLACE NEW YORK

1935

THE

ROBERT SCHALKENBACH
FOUNDATION

11 Park Place, New York

incorporated in 1925, to administer
a Trust Fund left by the will of
the late Robert Schalkenbach, for-
mer president of the New York
Typothetae, and such other funds
as may be donated to it, for the
purpose of spreading among the
people of this and other countries
a wider acquaintance with the so-
cial and economic philosophy of
HENRY GEORGE

Copyright, 1886, by
HENRY GEORGE

Att rights reserved

THE Country Life Press, GARDEN CITY, NEW YORK, u. s. A.

TO THE MEMORY
OF THOSE ILLUSTRIOUS FRENCHMEN

OF A CENTURY AGO
QUESNAY, TURGOT, MIRABEAU, CONDORCET, DUPONT

AND THEIR FELbOWS

WHO IN THE NIGHT OF DESPOTISM FORESAW
THE GLORIES OF THE COMING DAY

* Prove all things : hold fast that which is good. 19

PREFACE.

Ethis book I have endeavored to determine whether
protection or free trade better accords with the inter-
ests of labor, and to bring to a common conclusion on this
subject those who really desire to raise wages.

I have not only gone over the ground generally trav-
ersed, and examined the arguments commonly used,
but, carrying the inquiry further than the controversial-
ists on either side have yet ventured to go, I have sought
to discover why protection retains such popular strength
in spite of all exposures of its fallacies ; to trace the con-
nection between the tariff question and those still more
important social questions, now rapidly becoming the
"burning questions n of our times; and to show to what
radical measures the principle of free trade logically
leads. While pointing out the falsity of the belief that
tariffs can protect labor, I have not failed to recognize
the facts which give this belief vitality, and, by an exami-
nation of these facts, have shown, not only how little the
working-classes can hope from that mere "revenue
reform" which is miscalled "free trade," but how much
they have to hope from real free trade. By thus har-
monizing the truths which free traders perceive with the
facts that to protectionists make their own theory plau-
sible, I believe I have opened ground upon which those
separated by seemingly irreconcilable differences of
opinion may unite for that full application of the free-

iz

* PREFACE.

trade principle which would secure both the largest
production and the fairest distribution of wealth.

By thus carrying the inquiry beyond the point where
Adam Smith and the writers who have followed him
have stopped, I believe I have stripped the vexed tariff
question of its greatest difficulties, and have cleared the
way for the settlement of a dispute which otherwise
might go on interminably. The conclusions thus
reached raise the doctrine of free trade from the emas-
culated form in which it has been taught by the English
economists to the fullness in which it was held by the
predecessors of Adam Smith, those illustrious French-
men, with whom originated the motto Laissez faire, and
who, whatever may have been the confusions of their
terminology or the faults of their method, grasped a central
truth which free traders since their time have ignored.

My effort, in short, has been to make such a candid
and thorough examination of the tariff question, in all its
phases, as would aid men to whom the subject is now a
perplexing maze to reach clear and firm conclusions. In
this I trust I have done something to inspire a movement
now faint-hearted with the earnestness and strength of
radical conviction, to prevent the division into hostile
camps of those whom a common purpose ought to unite,
to give to efforts for the emancipation of labor greater
definiteness of purpose, and to eradicate that belief in the
opposition of national interests which leads peoples, even
of the same blood and tongue, to regard each other as
natural antagonists.

To avoid any appearance of culling absurdities, I have,
in referring to the protectionist position, quoted mainly
from the latest writer who seems to be regarded by
American protectionists as an authoritative exponent of
their viewsProfessor Thompson of the University of
Pennsylvania.

CONTENTS.

CHAPTER FAG*

I. INTRODUCTORY 1

n. CLEARING GROUND 11

m. OF METHOD 23

IV. PROTECTION AS A UNIVERSAL NEED 28

V. THE PROTECTIVE UNIT 37

VI. TRADE 45

VH. PRODUCTION AND PRODUCERS 60

Vm. TARIFFS FOR REVENUE 69

IX. TARIFFS FOR PROTECTION 80

X. THE ENCOURAGEMENT OF INDUSTRY 94

XI. THE HOME MARKET AND HOME TRADE 103

XII. EXPORTS AND IMPORTS 112

XIH. CONFUSIONS ARISING FROM THE USE OF MONEY . . 123

XIV. Do HIGH WAGES NECESSITATE PROTECTION t ... 135
XV. OF ADVANTAGES AND DISADVANTAGES AS REASONS

FOR PROTECTION 144

XVI. THE DEVELOPMENT OF MANUFACTURES 153

XVn. PROTECTION AND PRODUCERS 166

XVHI. EFFECTS OF PROTECTION ON AMERICAN INDUSTRY . 181

XIX. PROTECTION AND WAGES 195

XX. THE ABOLITION OF PROTECTION 217

INADEQUACY OF THE FREE-TRADE ARGUMENT . 224
xi

xii CONTENTS.

CHAPTER VAGI

XXTT. THE REAL WEAKNESS OF FREE TRADE 230

XXIII. THE REAL STRENGTH OF PROTECTION 242

XXIV. THE PARADOX 253

XXV. THE BOBBER THAT TAXES ALL THAT is LEFT . . 267

XXVL TRUE FREE TRADE 277

XXVn. THE LION IN THE WAT 291

XXVin. FREE TRADE AND SOCIALISM 299

XXIX. PRACTICAL POLITICS 313

CONCLUSION 327

INDEX . 333

PROTECTION OR FREE TRADE?

CHAPTER I.

INTRODUCTORY.

the window by which I write, a great bull is
tethered by a ring in his nose. Grazing round and
round he has wound his rope about the stake until now
he stands a close prisoner, tantalized by rich grass he
cannot reach, unable even to toss his head to rid him of
the flies that cluster on his shoulders. Now and again
he struggles vainly, and then, after pitiful bellowings,
relapses into silent misery.

This bull, a very type of massive strength, who, because
he has not wit enough to see how he might be free,
suffers want in sight of plenty, and is helplessly preyed
upon by weaker creatures, seems to me no unfit emblem
of the working masses.

In all lands, men whose toil creates abounding wealth
are pinched with poverty, and, while advancing civiliza-
tion opens wider vistas and awakens new desires, are
held down to brutish levels by animal needs. Bitterly
conscious of injustice, feeling in their inmost souls that
they were made for more than so narrow a life, they, too,
spasmodically struggle and cry out. But until they trace

\

2 PROTECTION OB FREE TRADE!

effect to cause, until they see how they are fettered and
how they may be freed, their straggles and outcries are
as vain as those of the bull. Nay, they are vainer. I
shall go out and drive the bull in the way that will
untwist his rope. But who shall drive men into free-
dom! Till they use the reason with which they have
been gifted, nothing can avail. For them there is no
special providence.

Under all forms of government the ultimate power lies
with the masses. It is not kings nor aristocracies, nor
landowners nor capitalists, that anywhere really enslave
the people. It is their own ignorance. Most clear is
this where governments rest on universal suffrage. The
working-men of the United States may mold to their will
legislatures, courts and constitutions. Politicians strive
for their favor and political parties bid against one
another for their vote. But what avails this ? The little
finger of aggregated capital must be thicker than the
loins of the working masses so long as they do not know
how to use their power. And how far from any agree-
ment as to practical reform are even those who most feel
the injustice of existing conditions may be seen in the
labor organizations. Though beginning to realize the
wastefulness of strikes and to feel the necessity of acting
on general conditions through legislation, these organiza-
tions when they come to formulate political demands
seem unable to unite upon any measures capable of large
results.

This political impotency must continue until the
masses, or at least that sprinkling of more thoughtful
men who are the file-leaders of popular opinion, shall
give such heed to larger questions as will enable them ta
agree on the path reform should take.

It is with the hope of promoting such agreement that
I propose in these pages to examine a vexed question

INTRODUCTORY. 3

which must be settled before there can be any efficient
union in political action for social reform the question
whether protective tariffs are or are not helpful to those
who get their living by their labor.

This is a question important in itself, yet far more
important in what it involves. Not only is it true that
its examination cannot fail to throw light upon other
social-economic questions, but it leads directly to that
great "Labor Question" which every day as it passes
brings more and more to the foreground in every country
of the civilized world. For it is a question of direction
a question which of two divergent roads shall be taken.
Whether labor is to be benefited by governmental restric-
tions or by the abolition of such restrictions is, in short,
the question of how the bull shall go to untwist his rope.

In one way or another, we must act upon the tariff
question. Throughout the civilized world it everywhere
lies within the range of practical politics. Even when
protection is most thoroughly accepted there not only
exists a more or less active minority who seek its over-
throw, but the constant modifications that are being
made or proposed in existing tariffs are as constantly
bringing the subject into the sphere of political action,
while even in that country in which free trade has
seemed to be most strongly rooted, the policy of protec-
tion is again raising its head. Here it is evident that
the tariff question is the great political question of the
immediate future. For more than a generation the
slavery agitation, the war to which it led and the prob-
lems growing out of that war have absorbed political
attention in the United States. That era has passed, and
a new one is beginning, in which economic questions
must force themselves to the front. First among these
questions, upon which party lines must soon be drawn
and political discussion must rage, is the tariff question.

4 PEOTECTION OE FREE TRADE!

It behooves not merely those who aspire to political
leadership, but those who would conscientiously use their
influence and their votes, to come to intelligent conclu-
sions upon this question, and especially is this incumbent
upon the men whose aim is the emancipation of labor.
Some of these men are now supporters of protection;
others are opposed to it. This division, which must
place in political opposition to each other those who are
at one in ultimate purpose, ought not to exist. One
thing or the other must be true either protection does
give better opportunities to labor and raises wages, or it
does not. If it does, we who feel that labor has not its
rightful opportunities and does not get its fair wages
should know it, that we may unite, not merely in sus-
taining present protection, but in demanding far more.
If it does not, then, even if not positively harmful to the
working-classes, protection is a delusion and a snare,
which distracts attention and divides strength, and the
quicker it is seen that tariffs cannot raise wages the
quicker are those who wish to raise wages likely to find
out what can. The next thing to knowing how anything
can be done, is to know how it cannot be done. If the
bull I speak of had wit enough to see the uselessness of
going one way, he would surely try the other.

My aim in this inquiry is to ascertain beyond perad-
venture whether protection or free trade best accords
with the interests of those who live by their labor. I
differ with those who say that with the rate of wages
the state has no concern. I hold with those who deem
the increase of wages a legitimate purpose of public
policy. To raise and maintain wages is the great object
that all who live by wages ought to seek, and working-
men are right in supporting any measure that will attain
that object. Nor in this are they acting selfishly, for,
while the question of wages is the most important of

INTRODUCTORY. 5

questions to laborers, it is also the most important of
questions to society at large. Whatever improves the
condition of the lowest and broadest social stratum must
promote the true interests of all. Where the wages of
common labor are high and remunerative employment is
easy to obtain, prosperity will be general. Where wages
are highest, there will be the largest production and the
most equitable distribution of wealth. There will inven-
tion be most active and the brain best guide the hand.
There will be the greatest comfort, the widest diffusion
of knowledge, the purest morals and the truest patriot-
ism. If we would have a healthy, a happy, an enlight-
ened and a virtuous people, if we would have a pure
government, firmly based on the popular will and quickly
responsive to it, we must strive to raise wages and keep
them high. I accept as good and praiseworthy the ends
avowed by the advocates of protective tariffs. What I
propose to inquire is whether protective tariffs are in
reality conducive to these ends. To do this thoroughly I
wish to go over all the ground upon which protective
tariffs are advocated or defended, to consider what effect
the opposite policy of free trade would have, and to stop
not until conclusions are reached of which we may feel
absolutely sure.

To some it may seem too much to think that this can
be done. For a century no question of public policy has
been so widely and persistently debated as that of Pro-
tection vs. Free Trade. Yet it seems to-day as far as
ever from settlement so far, indeed, that many have
come to deem it a question as to which no certain con-
clusions can be reached, and many more to regard it as
too complex and abstruse to be understood by those who
have not equipped themselves by long study.

This is, indeed, a hopeless view. We may safely leave
many branches of knowledge to such as can devote them-

6 PROTECTION OB FREE TRADE!

selves to special pursuits. We may safely accept what
chemists tell us of chemistry, or astronomers of astron-
omy, or philologists of the development of language, or
anatomists of our internal structure, for not only are
there in such investigations no pecuniary temptations to
warp the judgment, but the ordinary duties of men and
of citizens do not call for such special knowledge, and
the great body of a people may entertain the crudest
notions as to such things and yet lead happy and useful
lives. Far different, however, is it with matters which
relate to the production and distribution of wealth, and
which thus directly affect the comfort and livelihood of men.
The intelligence which can alone safely guide in these mat-
ters must be the intelligence of the masses, for as to such
things it is the common opinion, and not the opinion of
the learned few, that finds expression in legislation.

If the knowledge required for the proper ordering of
public affairs be like the knowledge required for the
prediction of an eclipse, the making of a chemical analy-
sis, or the decipherment of a cuneiform inscription, or
even like the knowledge required in any branch of art or
handicraft, then the shortness of human life and the
necessities of human existence must forever condemn the
masses of men to ignorance of matters which directly
affect their means of subsistence. If this be so, then
popular government is hopeless, and, confronted on one
side by the fact, to which all experience testifies, that a
people can never safely trust to any portion of their
number the making of regulations which affect their
earnings, and on the other by the fact that the masses
can never see for themselves the effect of such regulations,
the only prospect before mankind is that the many must
always be ruled and robbed by the few.

But this is not so. Political economy is only the econ-
omy of human aggregates, and its laws are laws which

INTRODUCTORY. 7

we may individually recognize. What is required for
their elucidation is not long arrays of statistics nor the
collocation of laboriously ascertained facts, but that sort
of clear thinking which, keeping in mind the distinction
between the part and the whole, seeks the relations of
familiar things, and which is as possible for the unlearned
as for the learned.

Whether protection does or does not increase national
wealth, whether it does or does not benefit the laborer,
are questions that from their nature must admit of deci-
sive answers. That the controversy between protection
and free trade, widely and energetically as it has been
carried on, has as yet led to no accepted conclusion can-
not therefore be due to difficulties inherent in the subject.
It may in part be accounted for by the fact that powerful
pecuniary interests are concerned in the issue, for it is
true, as Macaulay said, that if large pecuniary interests
were concerned in denying the attraction of gravitation,
that most obvious of physical facts would have disputers.
But that so many fair-minded men who have no special
interests to serve are still at variance on this subject can,
it seems to me, be fully explained only on the assump-
tion that the discussion has not been carried far enough
to bring out that full truth which harmonizes all partial
truths.

The present condition of the controversy, indeed,
shows this to be the fact. In the literature of the sub-
ject, I know of no work in which the inquiry has yet
been carried to its proper end. As to the effect of pro-
tection upon the production of wealth, all has probably
been said that can be said ; but that part of the question
which relates to wages and which is primarily concerned
with the distribution of wealth has not been adequately
treated. Yet this is the very heart of the controversy,
the ground from which, until it is thoroughly explored,

8 PROTECTION OR FREE TRADE!

fallacies and confusions must constantly arise, to envelop
in obscurity even that which has of itself been sufficiently
explained.

The reason of this failure is not far to seek. Political
economy is the simplest of the sciences. It is but the
intellectual recognition, as related to social life, of laws
which in their moral aspect men instinctively recognize,
and which are embodied in the simple teachings of Him
whom the common people heard gladly. But, like Chris-
tianity, political economy has been warped by institutions
which, denying the equality and brotherhood of man,
have enlisted authority, silenced objection, and ingrained
themselves in custom and habit of thought. Its profes-
sors and teachers have almost invariably belonged to or
been dominated by that class which tolerates no ques-
tioning of social adjustments that give to those who do
not labor the fruits of labor's toil. They have been like
physicians employed to make a diagnosis on condition
that they shall discover no unpleasant truth. Given
social conditions such as those that throughout the civi-
lized world to-day shock the moral sense, and political
economy, fearlessly pursued, must lead to conclusions
that will be as a lion in the way to those who have any
tenderness for "vested interests/' But in the colleges
and universities of our time, as in the Sanhedrim of old,
it is idle to expect any enunciation of truths unwelcome
to the powers that be.

Adam Smith demonstrated clearly enough that protec-
tive tariffs hamper the production of wealth. But Adam
Smith the university professor, the tutor and pensioner
of the Duke of Buccleuch, the prospective holder of a
government place either did not deem it prudent to go
further, or, as is more probable, was prevented from
seeing the necessity of doing so by the atmosphere of his
time and place. He at any rate failed to carry his great
inquiry into the causes which from "that original state

INTRODUCTORY. 9

at things in which the production of labor constitutes
the natural recompense or wages of labor" had developed
a state of things in which natural wages seemed to be
only such part of the produce of labor as would enable
the laborer to exist. And, following Smith, came Mai-
thus, to formulate a doctrine which throws upon the
Creator the responsibility for the want and vice that flow
from man's injustice a doctrine which has barred from
the inquiry which Smith did not pursue even such high
and generous minds as that of John Stuart Mill. Some
of the publications of the Anti-Corn-Law League contain
indications that if the struggle over the English corn-
laws had been longer continued, the discussion might
have been pushed further than the question of revenue
tariff or protective tariff ; but, ending as it did, the capi-
talists of the Manchester school were satisfied, and in
such discussion as has since ensued English free traders,
with few exceptions, have made no further advance,
while American advocates of free trade have merely
followed the English free traders.

On the other hand, the advocates of protection have
evinced a like indisposition to venture on burning
ground. They extol the virtues of protection as furnish-
ing employment, without asking how it comes that any
one should need to be furnished with employment ; they
assert that protection maintains the rate of wages, with-
out explaining what determines the rate of wages. The
ablest of them, under the lead of Carey, have rejected the
Malthusian doctrine, but only to set up an equally unten-
able optimistic theory which serves the same purpose of
barring inquiry into the wrongs of labor, and which has
been borrowed by Continental free traders as a weapon
with which to fight the agitation for social reform.

That, so far as it has yet gone, the controversy
between protection and free trade has not been carried
to its logical conclusions is evident from the positions

10 PROTECTION OB FREE TRADE!

which both sides occupy. Protectionists and free traders
alike seem to lack the courage of their convictions. If
protection have the virtues claimed for it, why should it
be confined to the restriction of imports from foreign
countries? If it really "provides employment" and
raises wages, then a condition of things in which hun-
dreds of thousands vainly seek employment, and wages
touch the point of bare subsistence, demands a far more
vigorous application of this beneficent principle than any
protectionist has yet proposed. On the other hand, if
the principle of free trade be true, the substitution of a
revenue tariff for a protective tariff is a ridiculously
inefficient application of it.

Like the two knights of allegory, who, halting one on
each side of the shield, continued to dispute about it
when the advance of either must have revealed a truth
that would have ended their controversy, protectionists
and free traders stand to-day. Let it be ours to carry
the inquiry wherever it may lead. The fact is, that fully
to understand the tariff question we must go beyond the
tariff question as ordinarily debated. And here, it may
be, we shall find ground on which honest divergences of
opinion may be reconciled, and facts which seem conflict*
ing may fall into harmonious relations.

CHAPTER n.

CLEARING GROUND.

protective theory has certainly the weight of
most general acceptance. Forty years ago all civi-
lized countries based their policy upon it; and though
Great Britain has since discarded it, she remains the only
considerable nation that has done so, while not only
have her own colonies, as soon as they have obtained the
power, shown a disposition to revert to it, but such a dis-
position has of late years been growing in Great Britain
herself.

It should be remembered, however, that the presump-
tion in favor of any belief generally entertained has
existed in favor of many beliefs now known to be
entirely erroneous, and is especially weak in the case of
a theory which, like that of protection, enlists the support
of powerful special interests. The history of mankind
everywhere shows the power that special interests, capa-
ble of organization and action, may exert in securing
the acceptance of the most monstrous doctrines. We
have, indeed, only to look around us to see how easily a
small special interest may exert greater influence in
forming opinion and making laws than a large general
interest. As what is everybody's business is nobody's
business, so what is everybody's interest is nobody's
interest. Two or three citizens of a seaside town see

11

12 PROTECTION OR FREE TRADE?

that the building of a custom-house or the dredging of a
creek will put money in their pockets; a few silver-
miners conclude that it will be a good thing for them to
have the government stow away some millions of silver
every month; a navy contractor wants the profit of
repairing useless ironclads or building needless cruisers,
and again and again such petty interests have their way
against the larger interests of the whole people. What
can be clearer than that a note directly issued by the
government is at least as good as a note based on a
government bond? Yet special interests have sufficed
with us to institute and maintain a hybrid currency for
which no other valid reason can be assigned than private
profit.

Those who are specially interested in protective tariffs
find it easy to believe that protection is of general benefit.
The directness of their interest makes them active in
spreading their views, and having control of large means
for the protected industries are those in which large
capitals are engaged and being ready on occasion, as a
matter of business, to spend money in propagating their
doctrines, they exert great influence upon the organs of
public opinion. Free trade, on the contrary, offers no
special advantage to any particular interest, and in the
present state of social morality benefits or injuries which
men share in common with their fellows are not felt so
intensely as those which affect them specially.

I do not mean to say that the pecuniary interests
which protection enlists suffice to explain the wide-spread
acceptance of its theories and the tenacity with which
they are held. But it is plain that these interests do
constitute a power of the kind most potent in forming
opinion and influencing legislation, and that this fact
weakens the presumption the wide acceptance of protec-
tion might otherwise afford, and is a reason why those

CLEABING GROUND. 13

who believe in protection merely because they have con-
stantly heard jt praised should examine the question for
themselves.

Protection, moreover, has always found an effective ally
in those national prejudices and hatreds which are in
part the cause and in part the result of the wars that
have made the annals of mankind a record of bloodshed
and devastation prejudices and hatreds which have
everywhere been the means by which the masses have
been induced to use their own power for their own
enslavement.

For the first half-century of our national existence
American protectionists pointed to the protective tariff
of Great Britain as an example to be followed ; but since
that country, in 1846, discarded protection, its American
advocates have endeavored to utilize national prejudice
by constantly speaking of protection as an American
system and of free trade as a British invention. Just
now they are endeavoring to utilize in the same way the
enmity against everything British which long oppres-
sions and insults have engendered in the Irish heart,
and, in the words of a recent political platform, Irish-
Americans are called upon "to resist the introduction
into America of the English theory of free trade, which
has been so successfully used as a means to destroy the
industries and oppress the people of Ireland."

Even if free trade had originated in Great Britain we
should be as foolish in rejecting it on that account as
we should be in refusing to speak our mother tongue
because it is of British origin, or in going back to hand-
and water-power because steam-engines were first intro-
duced in Great Britain. But, in truth, free trade no
more originated in Great Britain than did the habit of
walking on the feet. Free trade is the natural trade
the trade that goes on in the absence of artificial restric-

14 PEOTECTION OB FREE TRADE!

tions. It is protection that had to be invented. But
instead of being invented in the United States, it was in
full force in Great Britain long before the United States
were thought of. It would be nearer the truth to say
that protection originated in Great Britain, for, if the
system did not originate there, it was fully developed
there, and it is from that country that it has been
derived by us. Nor yet did the reaction against it origi-
nate in Great Britain, but in France, among a school of
eminent men headed by Quesnay, who were Adam
Smith's predecessors and in many things his teachers.
These French economists were what neither Smith nor
any subsequent British economist or statesman has been
true free traders. They wished to sweep away not
merely protective duties, but all taxes, direct and indi-
rect, save a single tax upon land values. This logical
conclusion of free-trade principles the so-called British
free traders have shirked, and it meets to-day as bitter
opposition from the Gobden Club as from American pro-
tectionists. The only sense in which we can properly
speak of " British free trade " is the same sense in which
we speak of a certain imitation metal as " German silver."
" British free trade n is spurious free trade. Great Brit-
ain does not really enjoy free trade. To say nothing of
internal taxes, inconsistent with true free trade, she still
maintains a cordon of custom-house officers, coast-guards
and baggage-searchers, and still collects over a hundred
million dollars of her revenue from import duties. To
be sure, her tariff is "for revenue only," but a tariff for
revenue only is not free trade. The ruling classes of
Great Britain have adopted only so much free trade as
suits their class interests, and the battle for free trade in
that country has yet to be fought.

On the other hand, it is absurd to talk of protection as
aA American system. It had been fully developed in

CLEARING GROUND. 15

Europe before the American colonies were planted, and
during our colonial period England maintained a more
thorough system of protection than now anywhere exists
a system which aimed at building up English indus-
tries not merely by protective duties, but by the repres-
sion of like industries in Ireland and the colonies, and
wherever else throughout the world English power could
be exerted. What we got of protection was the wrong
side of it, in regulations intended to prevent American
industries from cpmpeting with those of the mothei
country and to give to her a monopoly of the American
trade.

The irritation produced in the growing colonies by
these restrictions was the main cause of the Revolution
which made of them an independent nation. Protec-
tionist ideas were doubtless at that time latent among
our people, for they permeated the mental atmosphere of
the civilized world, but so little disposition was there to
embody those ideas in a national policy, that the Ameri-
can representatives in negotiating the treaty of peace
endeavored to secure complete freedom of trade between
the United States and Great Britain. This was refused
by England, then and for a long time afterwards com-
pletely dominated by protective ideas. But during the
period following the Revolution in which the American
Union existed under the Articles of Confederation, no
tariff hampered importations into the American States.

The adoption of the Constitution made a Federal tariff
possible, and to give the Federal Government an inde-
pendent revenue a tariff was soon imposed ; but although
protection had then begun to find advocates in the
United States, this first American tariff was almost
nominal as compared with what the British tariff was
then or our tariff is now. And in the Federal Constitu-
tion State tariffs were prohibited a step which has re.

16 PROTECTION OB FREE TRADE!

suited in giving to the principle of free trade the greatest
extension it has had in modern times. Nothing could
more clearly show how far the American people then
were from accepting the theories of protection since
popularized among them, for the national idea had not
then acquired the force it has since gained, and if protec-
tion had then been looked upon as necessary the different
States would not without a struggle have given up the
power of imposing tariffs of their own.

Nor could protection have reached i^s present height in
the United States but for the civil war. While attention
was concentrated on the struggle and mothers were
sending their sons to the battle-field, the interests that
sought protection took advantage of the patriotism that
was ready for any sacrifice to secure protective taxes
such as had never before been dreamed of taxes which
they have ever since managed to keep in force, and even
in many cases to increase.

The truth is that protection is no more American than
is the distinction made in our regular army and navy
between commissioned officers and enlisted men a dis-
tinction not of degree but of kind, so that there is
between the highest non-commissioned officer and the
lowest commissioned officer a deep gulf fixed, a gulf
which can only be likened to that which exists between
white and black where the color-line is drawn sharpest.
This distinction is historically a survival of that made in
the armies of aristocratic Europe, when they were offi-
cered by nobles and recruited from peasants, and has
been copied by us in the same spirit of imitation that has
led us to copy other undemocratic customs and institu-
tions. Though we preserve this aristocratic distinction
after it has been abandoned in some European countries,
it is in no sense American. It neither originated with
us nor does it consort with our distinctive ideas and

CLEARING GROUND. 17

institutions. So it is with protection. Whatever be its
economic merits there can be no doubt that it conflicts with
those ideas of natural right and personal freedom which
received national expression in the establishment of the
American Republic, and which we have been accustomed
to regard as distinctively American. What more incon-
gruous than the administering of custom-house oaths and
the searching of trunks and hand-bags under the shadow
of "Liberty Enlightening the World "1

As for the assertion that " the English theory of free
trade " has been used "to destroy the industries and
oppress the people of Ireland/' the truth is that it was
"the English theory of protection " that was so used.
The restrictions which British protection imposed upon
the American colonies were trivial as compared with
those imposed upon Ireland. The successful resistance
of the colonies roused in Ireland the same spirit, and led
to the great movement of " Irish Volunteers," who, with

cannon bearing the inscription "Free Trade or !*

forced the repeal of those restrictions and won for a
time Irish legislative independence.

Whether Irish industries that were unquestionably
hampered and throttled by British protection could now
be benefited by Irish protection, like the question
whether protection benefits the United States, is only to
be settled by a determination of the effects of protection
upon the country that imposes it. But without going
into that, it is evident that the free trade between Great
Britain and Ireland which has existed since the union in
1801, has not been the cause of the backwardness of
Irish industry. There is one part of Ireland which has
enjoyed comparative prosperity and in which important
industries have grown up some of them, such as the
building of iron ships, for which natural advantages
cannot be claimed. How can this be explained on the

18 PROTECTION OB FREE TRADE?

theory that Irish industries cannot be reestablished with*
out protection?

If the very men who are now trying to persuade Irish-
American voters that Ireland has been impoverished by
"British free trade * were privately asked the cause of
the greater prosperity of Ulster over other parts of Ire-
land, they would probably give the answer made familiar
by religious bigotrythat Ulster is enterprising and
prosperous because it is Protestant, while the rest of
Ireland is sluggish and poor because it is Catholic. But
the true reason is plain. It is, that the land tenure in
Ulster has been such that a larger portion of the wealth
produced has been left there than in other parts of Ire-
land, and that the mass of the people have not been so
remorselessly hunted and oppressed. In Presbyterian
Skye the same general poverty, the same primitive condi-
tions of industry exist as in Catholic Connemara, and its
cause is to be seen in the same rapacious system of land-
lordism which has carried off the fruits of industry and
prevented the accumulation of capital. To attribute the
backwardness of industry among a people who are
steadily stripped of all they can produce above a bare
living to the want of a protective tariff or to religious
opinions is like attributing the sinking of a scuttled ship
to the loss of her figurehead or the color of her paint.

What, however, in the United States at least, has
tended more than any appeals to national feeling to
dispose the masses in favor of protection, has been the
difference of attitude toward the working-classes assumed
by the contending policies. In its beginnings in this
country protection was strongest in those sections where
labor had the largest opportunities and was held in the
highest esteem, while the strength of free trade has been
the greatest in the section in which up to the civil war
slavery prevailed. The political party which success-

CLEARING GROUND. 19

fully challenged the aggressions of the slave power also
declared for a protective tariff, while the men who tried
to rend the Union in order to establish a nation based
upon the right of capital to own labor, prohibited protec-
tion in the constitution they formed. The explanation
of these facts is, that in one section of the country there
were many industries that could be protected, while in
the other section there were few. While American
cotton culture was in its earlier stages, Southern cotton-
planters were willing enough to avail themselves of a
heavy duty on India cottons, and Louisiana sugar-
growers have always been persistent sticklers for protec-
tion. But when cotton raised for export became the
great staple of the South, protection, in the absence of
manufactures, was not only clearly opposed to dominant
Southern interests, but assumed the character of a sec-
tional imposition by which the South was taxed for the
benefit of the North. This sectional division on the tariff
question had no reference whatever to the conditions of
labor, but in many minds its effect has been to associate
protection with respect for labor and free trade with its
enslavement.

Irrespective of this there has been much in the presen.
tation of the two theories to dispose the working-classes
toward protection and against free trade. Working-men
generally feel that they do not get a fair reward for their
labor. They know that what prevents them from suc-
cessfully demanding higher wages is the competition of
others anxious for work, and they are naturally disposed
to favor the doctrine or party that proposes to shield
them from competition. This, its advocates urge, is the
aim of protection. And whatever protection accom-
plishes, protectionists at least profess regard for the
working-classes, and proclaim their desire to use the
powers of government to raise and maintain wages.

20 PROTECTION OB FREE TRADE?

Protection, they declare, means the protection of labor.
So constantly is this reiterated that many suppose that
this is the real derivation of the term, and that " protec-
tion " is short for "protection of labor."

On the other hand, the opponents of protection have,
for the most part, not only professed no special interest
in the well-being of the working-classes and no desire to
raise wages, but have denied the justice of attempting to
use the powers of government for this purpose. The
doctrines of free trade have been intertwined with teach-
ings that throw upon the laws of nature responsibility
for the poverty of the laboring-class, and foster a callous
indifference to their sufferings. On the same grounds
on which they have condemned legislative interference
with commerce, free-trade economists have condemned
interference with hours of labor, with the rate of wages,
and even with the employment of women and children,
and have united protectionism and trades-unionism in
the same denunciation, proclaiming supply and demand
to be the only true and rightful regulator of the price of
labor as of the price of pig-iron. While protesting
against restrictions upon the production of wealth they
have ignored the monstrous injustice of its distribution,
and have treated as fair and normal that competition in
which human beings, deprived of their natural oppor-
tunities of employing themselves, are compelled by
biting want to bid against one another.

All this is true. But it is also true that the needs of
labor require more than kind words, and are not to be
satisfied by such soft phrases as we address to a horse
when we want to catch him that we may put a bit in his
mouth and a saddle on his back. Let me ask those who
are disposed to regard protection as favorable to the
aspirations of labor, to consider whether it can be true
that what labor needs is to be protected?

CLEARING GROUND. 21

To admit that labor needs protection is to acknowledge
its inferiority 5 it is to acquiesce in an assumption that
degrades the workman to the position of a dependent,
and leads logically to the claim that the employee is
bound to vote in the interest of the employer who
provides him with work. There is something in the very
word "protection" that ought to make working-men
cautious of accepting anything presented to them under
it. The protection of the masses has in all times been
the pretense of tyrannythe plea of monarchy, of aris-
tocracy, of special privilege of every kind. The slave-
owners justified slavery as protecting the slaves. British
misrule in Ireland is upheld on the ground that it is for
the protection of the Irish. But, whether under a mon-
archy or under a republic, is there an instance in the
history of the world in which the " protection " of the
laboring masses has not meant their oppression? The
protection that those who have got the law-making
power into their hands have given to labor, has at best
always been the protection that man gives to cattle he
protects them that he may use and eat them.

There runs through protectionist professions of con-
cern for labor a tone of condescending patronage more
insulting to men who feel the true dignity of labor than
frankly expressed contempt could be an assumption
that pauperism is the natural condition of labor, to
which it must everywhere fall unless benevolently pro-
tected. It is never intimated that the landowner or the
capitalist needs protection. They, it is always assumed,
can take care of themselves. It is only the poor work-
ing-man who must be protected.

What is labor that it should so need protection? Is
not labor the creator of capital, the producer of all
wealth! Is it not the men who labor that feed and
clothe all others T Is it not true, as has been said, that

22 PROTECTION OB FREE TRADE!

the three great orders of society are "Working-men,
beggar-men and thieves " f How, then, does it come that
working-men alone need protection! When the first
man came upon the earth who was there to protect him
or to provide him with employment! Yet whenever or
however he came, he must have managed to get a living
and raise a family !

When we consider that labor is the producer of all
wealth, is it not evident that the impoverishment and
dependence of labor are abnormal conditions resulting
from restrictions and usurpations, and that instead of
accepting protection, what labor should demand is free-
dom! That those who advocate any extension of free-
dom choose to go no further than suits their own special
purpose is no reason why freedom itself should be dis-
trusted. For years it was held that the assertion of our
Declaration of Independence that all men are created
equal and endowed by their Creator with unalienable
rights, applied only to white men. But this in no wise
vitiated the principle. Nor does it vitiate the principle
that it is still held to apply only to political rights.

And so, that freedom of trade has been advocated by
those who have no sympathy with labor should not pre-
judice us against it. Can the road to the industrial
emancipation of the masses be any other than that of
freedom!

CHAPTER in.

OF METHOD.

ON the deck of a ship men are pulling on a rope, and
on her mast a yard is rising. A man aloft is clinging
to the tackle that raises the yard. Is his weight assisting
its rise or retarding it? That, of course, depends on
what part of the tackle his weight is thrown upon, and
can be told only by noticing whether its tendency is with
or against the efforts of those who pull on deck.

If in things so simple we may easily err in assuming
cause from effect, how much more liable to error are
such assumptions in regard to the complicated phenom-
ena of social life.

Much that is urged in current discussions of the tariff
question is of no validity whatever, and however it may
serve the purpose of controversy, cannot aid in the dis-
covery of truth. That a thing exists with or follows
another thing is no proof that it is because of that other
thing. This assumption is the fallacy post hoc, ergo
propter hoc, which leads, if admitted, to the most prepos-
terous conclusions. Wages in the United States are
higher than in England, and we differ from England in
having a protective tariff. But the assumption that the
one fact is because of the other, is no more valid than
would be the assumption that these higher wages are due
to our decimal coinage or to our republican form of

24 PROTECTION OB FBEE TRADE f

government. That England has grown in wealth since
the abolition of protection proves no more for free trade
than the growth of the United States under a protective
tariff does for protection. It does not follow that an
institution is good because a country has prospered
under it, nor bad because a country in which it exists is
not prosperous. It does not even follow that institu-
tions to be found in all prosperous countries and not to
be found in backward countries are therefore beneficial.
For this, at various times, might have been confidently
asserted of slavery, of polygamy, of aristocracy, of estab-
lished churches, and it may still be asserted of public
debts, of private property in land, of pauperism, or of
the existence of distinctively vicious or criminal classes.
Nor even when it can be shown that certain changes in
the prosperity of a country, of an industry, or of a class,
have followed certain other changes in laws or institu-
tions can it be inferred that the two are related to each
other as effect and cause, unless it can also be shown
that the assigned cause tends to produce the assigned
effect, or unless, what is clearly impossible in most cases,
it can be shown that there is no other cause to which the
effect can be attributed. The almost endless multiplicity
of causes constantly operating in human societies, and
the almost endless interference of effect with effect, make
that popular mode of reasoning which logicians call the
method of simple enumeration worse than useless in
social investigations.

As for reliance upon statistics, that involves the addi-
tional difficulty of knowing whether we have the right
statistics. Though "figures cannot lie," there is in their
collection and grouping such liability to oversight and
such temptation to bias that they are to be distrusted in
matters of controversy until they have been subjected to

OF METHOD. 25

/igid examination. The value of most arguments turn-
ing upon statistics is well illustrated in the story of the
government clerk who, being told to get up the statistics
of a certain question, wished first to know which side it
was desired that they should support. Under their
imposing appearance of exactness may lurk the gravest
errors and wildest assumptions.

To ascertain the effect of protective tariffs, we must
inquire what they are and how they operate. When we
thus discover their nature and tendencies, we shall be
able to weigh what is said for or against them, and have
a clue by which we may trace their results amid the com-
plications of social phenomena. For the largest com-
munities are but expansions of the smallest communities,
and the rules of arithmetic by which we calculate gain or
loss on transactions of dollars apply as well to transac-
tions of hundreds of millions.

Thus the facts we must use and the principles we must
apply are common facts that are known to all and prin-
ciples that are recognized in every-day life. Starting
from premises as to which there can be no dispute, we
have only to be careful as to our steps in order to reach
conclusions of which we may feel sure. We cannot
experiment with communities as the chemist can with
material substances, or as the physiologist can with
animals. Nor can we find nations so alike in all other
respects that we can safely attribute any difference in
their conditions to the presence or absence of a single
cause without first assuring ourselves of the tendency of
that cause. But the imagination puts at our command
a method of investigating economic problems which is
within certain limits hardly less useful than actual
experiment. We may test the working of known prin-
ciples by mentally separating, combining or eliminating

26 PROTECTION OB FREE TRADE!

conditions. Let me explain what I mean by an illustra-
tion I have once before used.*

When I was a boy I went down to the wharf with
another boy to see the first iron steamship that had ever
crossed the ocean to Philadelphia. Now, hearing of an
iron steamship seemed to us then a good deal like hearing
of a leaden kite or a wooden cooking-stove. But we had
not been long aboard of her, before my comrade said in
a tone of contemptuous disgust : " Pooh ! I see how it is.
She's all lined with wood ; that's the reason she floats."
I could not controvert him for the moment, but I was
not satisfied, and sitting down on the wharf when he left
me, I set to work trying mental experiments. If it was
the wood inside of her that made her float, then the more
wood the higher she would float ; and, mentally, I loaded
her up with wood. But, as I was familiar with the pro-
cess of making boats out of blocks of wood, I at once
saw that, instead of floating higher, she would sink
deeper. Then, I mentally took all the wood out of her,
as we dug out our wooden boats, and saw that thus
lightened she would float higher still. Then, in imagina-
tion, I jammed a hole in her, and saw that the water
would run in and she would sink, as did our wooden
boats when ballasted with leaden keels. And thus I
saw, as clearly as though I could have actually made
these experiments with the steamer, that it was not
the wooden lining that made her float, but her hollow-
ness, or, as I would now phrase it, her displacement of
water.

In such ways as this, with which we are all familiar,
we can isolate, analyze or combine economic principles,
and, by extending or diminishing the scale of proposi-

* Lecture before the students of the University of California, on
the "Study of Political Economy," April, 1877.

OF METHOD. 27

turns, either subject them to inspection through a mental
magnifying-glass or bring a larger field into view. And
this each one can do for himself. In the inquiry upon
which we are about to enter, all I ask of the reader is
that he shall in nothing trust to me.

CHAPTER IV.

PROTECTION AS A UNIVERSAL NEED.

FT10 understand a thing it is often well to begin by
J. looking at it, as it were, from the outside and
observing its relations, before examining it in detail.
Let us do this with the protective theory.

Protection, as the term has come to signify a certain
national policy, means the levying of duties upon im-
ported commodities for the purpose of protecting from
competition the home producers of such commodities.
Protectionists contend that to secure the highest pros-
perity of each nation it should produce for itself every-
thing it is capable of producing, and that to this end its
home industries should be protected against the compe-
tition of foreign industries. They also contend (in the
United States at least) that to enable workmen to obtain
as high wages as possible they should be protected by
tariff duties against the competition of goods produced
in countries where wages are lower. Without disputing
the correctness of this theory, let us consider its larger
relations.

The protective theory, it is to be observed, asserts a
general law, as true in one country as in another. How-
ever protectionists in the United States may talk of
"American protection 77 and "British free trade, 77 pro-
tection is, and of necessity must be, advocated as of

PROTECTION AS A UNIVERSAL NEED. 29

universal application. American protectionists nse the
arguments of foreign protectionists, and even where
they complain that the protective policy of other coun-
tries is injurious to us, commend it as an example which
we should follow. They contend that (at least up to a
certain point in national development) protection is
everywhere beneficial to a nation, and free trade every-
where injurious ; that the prosperous nations have built
up their prosperity by protection, and that all nations
that would be prosperous must adopt that policy. And
their arguments must be universal to have any plausi-
bility, for it would be absurd to assert that a theory of
national growth and prosperity applies to some countries
and not to others.

Let me ask the reader who has hitherto accepted the
protective theory to consider what its necessarily uni-
versal character involves. It was the realization of this
that first led me to question that theory. I was for a
number of years after I had come of age a protectionist,
or rather, I supposed I was, for, without real examina-
tion, I had accepted the belief, as in the first place we all
accept our beliefs, on the authority of others. So far,
however, as I thought at all on the subject, I was logical,
and I well remember how when the Florida and Alabama
were sinking American ships at sea, I thought their
depredations, after all, a good thing for the State in
which I lived California since the increased risk and
cost of ocean carriage in American ships (then the only
way of bringing goods from the Eastern States to Cali-
fornia) would give to her infant industries something of
that needed protection against the lower wages and
better established industries of the Eastern States which
the Federal Constitution prevented her from securing by
a State tariff. The full bearing of such notions never
occurred to me till I happened to hear the protective

30 PROTECTION OB FREE TRADE?

theory elaborately expounded by an able man. As he
urged that American industries must be protected from
the competition of foreign countries, that we ought to
work up our own raw materials and allow nothing to be
imported that we could produce for ourselves, I began
to realize that these propositions, if true, must be uni-
versally true, and that not only should every nation shut
itself out from every other nation ; not only should the
various sections of every large country institute tariffs
of their own to shelter their industries from the competi-
tion of other sections, but that the reason given why no
people should obtain from abroad anything they might
make at home, must apply as well to the family. It was
this that led me to weigh arguments I had before accepted
without real examination.

It seems to me impossible to consider the necessarily
universal character of the protective theory without
feeling it to be repugnant to moral perceptions and
inconsistent with the simplicity and harmony which we
everywhere discover in natural law. What should we
think of human laws framed for the government of a
country which should compel each family to keep con-
stantly on their guard against every other family, to
expend a large part of their time and labor in preventing
exchanges with their neighbors, and to seek their own
prosperity by opposing the natural efforts of other fami-
lies to become prosperous! Yet the protective theory
implies that laws such as these have been imposed by the
Creator upon the families of men who tenant this earth.
It implies that by virtue of social laws, as immutable as
the physical laws, each nation must stand jealously on
guard against every other nation and erect artificial
obstacles to national intercourse. It implies that a
federation of mankind, such as that which prevents the
establishment of tariffs between the States of the Amen*

PROTECTION AS A UNIVERSAL NEED. 31

can Union, would be a disaster to the race, and that in
an ideal world each nation would be protected from
every other nation by a cordon of tax-collectors, with
their attendant spies and informers.

Such a theory might consort with that form of poly-
theism which assigned to each nation a separate and
hostile God ; but it is hard to reconcile it with the idea
of the unity of the Creative Mind and the universality of
law. Imagine a Christian missionary expounding to a
newly discovered people the sublime truths of the gospel
of peace and love the fatherhood of God ; the brother-
hood of man ; the duty of regarding the interests of our
neighbors equally with our own, and of doing to others
as we would have them do to us. Could he, in the
same breath, go on to declare that, by virtue of the
laws of this same God, each nation, to prosper, must
defend itself against all other nations by a protective
tariff?

Religion and experience alike teach us that the highest
good of each is to be sought in the good of others ; that
the true interests of men are harmonious, not antago-
nistic ; that prosperity is the daughter of good will and
peace ; and that want and destruction follow enmity and
strife. The protective theory, on the other hand, implies
the opposition of national interests ; that the gain of one
people is the loss of others ; that each must seek its own
good by constant efforts to get advantage over others
and to prevent others from getting advantage over it.
It makes of nations rivals instead of cooperators; it
inculcates a warfare of restrictions and prohibitions and
searchings and seizures, which differs in weapons, but
not in spirit, from that warfare which sinks ships and
burns cities. Can we imagine the nations beating their
swords into plowshares and their spears into pruning*
hooks and yet maintaining hostile tariffs}

32 PROTECTION OB FREE TRADE f

No matter whether he call himself Christian or Deist,
or Agnostic or Atheist, who can look about him without
seeing that want and suffering flow inevitably from self*
ishness, and that in any community the golden rule
which teaches us to regard the interests of others as
carefully as our own would bring not only peace but
plenty t Can it be that what is true of individuals
ceases to be true of nations that in one sphere the law
of prosperity is the law of love; in the other that of
strife f On the contrary, universal history testifies that
poverty, degradation and enslavement are the inevitable
results of that spirit which leads nations to regard each
other as rivals and enemies.

Every political truth must be a moral truth. Yet who
can accept the protective theory as a moral truth T

A few months ago I found myself one night, with four
other passengers, in the smoking-car of a Pennsylvania
limited express-train traveling west. The conversation,
beginning with fast trains, turned to fast steamers, and
then to custom-house experiences. One told how, com-
ing from Europe with a trunk filled with presents for his
wife, he had significantly said to the custom-house
inspector detailed to examine his trunks that he was in a
hurry. "How much of a hurry !" said the officer.
"Ten dollars' worth of a hurry," was the reply. The
officer took a quick look through the trunk and
remarked, "That's not much of a hurry for all this."
"I gave him ten more," said the story-teller, "and he
chalked the trunk."

Then another told how under similar circumstances he
had placed a magnificent meerschaum pipe so that it
would be the first thing seen on lifting the trunk-lid,
and, when the officer admired it, had replied that it was
his. The third said he simply put a greenback conspicu-
ously in the first article of luggage ; and the fourth told

PROTECTION AS A UNTVEBSAL NEED. 33

how his plan was to crumple up a note, and put it with
his keys in the officer's hands.

Here were four reputable business men, as I afterward
found them to be one an iron-worker, one a coal-pro*
ducer, and the other two manufacturers men of at least
average morality and patriotism, who not only thought
it no harm to evade the tariff, but who made no scruple
of the false oath necessary, and regarded the bribery of
customs officers as a good joke. I had the curiosity to
edge the conversation from this to the subject of free
trade, when I found that all four were stanch protec-
tionists, and by edging it a little further I found that all
four were thorough believers in the right of an employer
to discharge any workman who voted for a free-trade
candidate, holding, as they put it, that no one ought to
eat the bread of an employer whose interests he opposed.

I recall this conversation because it is typical. Who-
ever has traveled on trans- Atlantic steamers has listened
to such conversations, and is aware that the great
majority of the American protectionists who visit
Europe return with purchases which they smuggle
through, even at the expense of a "custom-house oath"
and a greenback to the examining officer. Many of our
largest undervaluation smugglers have been men of the
highest social and religious standing, who gave freely of
their spoils to churches and benevolent societies. Not
long ago a highly respected banker, an extremely reli-
gious man, who had probably neglected the precautions
of my smoking-car friends, was detected in the endeavor
to smuggle through in his luggage (which he had of
course taken a "custom-house oath" did not contain
anything dutiable) a lot of very valuable presents to a
church !

Conscientious men will (until they get used to them)
shrink from false oaths, from bribery, or from other

34 PROTECTION OB FREE TRADE?

means necessary to evade a tariff, but even of believers
in protection are there any who really think snch eva-
sions wrong in themselves? What theoretical protec-
tionist is there, who, if no one was watching him, would
scruple to carry a box of cigars or a dress-pattern, or
anything else that could be carried, across a steamer
wharf or across Niagara bridge? And why should he
scruple to carry such things across a wharf, a river, or
an imaginary line, since once inside the custom-house
frontier no one would object to his carrying them thou-
sands of miles ?

That unscrupulous men, for their own private advan-
tage, break laws intended for the general good proves
nothing; but that no one really feels smuggling to be
wrong proves a good deal. Whether we hold the basis
of moral ideas to be intuitive or utilitarian, is not the
fact that protection thus lacks the support of the moral
sentiment inconsistent with the idea that tariffs are
necessary to the well-being and progress of mankind!
If, as is held by some, moral perceptions are implanted
in our nature as a means whereby our conduct may be
instinctively guided in such way as to conduce to the
general well-being, how is it, if the Creator has ordained
that man should prosper by protective tariffs, that the
moral sense takes no cognizance of such a law? If, as
others hold, what we call moral perceptions be the result
of general experience of what conduces to the common
good, how is it that the beneficial effects of protection
have not developed moral recognition?

To make that a crime by statute which is no crime in
morals, is inevitably to destroy respect for law ; to resort
to oaths to prevent men from doing what they feel
injures no one, is to weaken the sanctity of oaths. Cor-
ruption, evasion and false swearing are inseparable from
tariffs. Can that be good of which these are the fruits}

PROTECTION AS A UNIVERSAL NEED. 35

A system which requires such spying and searching,
such invoking of the Almighty to witness the contents
of every box, bundle and package a system which
always has provoked, and in the nature of man always
must provoke, corruption and fraud can it be necessary
to the prosperity and progress of mankind ?

Consider, moreover, how sharply this theory of protec-
tion conflicts with common experience and habits of
thought. Who would think of recommending a site for
a proposed city or a new colony because it was very diffi-
cult to get at ? Yet, if the protective theory be true, this
would really be an advantage. Who would regard
piracy as promotive of civilization? Yet a discriminat-
ing pirate, who would confine his seizures to goods which
might be produced in the country to which they were
being carried, would be as beneficial to that country as a
tariff.

Whether protectionists or free traders, we all hear
with interest and pleasure of improvements in transpor-
tation by water or landj we are all disposed to regard
the opening of canals, the building of railways, the
deepening of harbors, the improvement of steamships, as
beneficial. But if such things are beneficial, how can
tariffs be beneficial? The effect of such things is to
lessen the cost of transporting commodities ; the effect of
tariffs is to increase it. If the protective theory be true,
every improvement that cheapens the carriage of goods
between country and country is an injury to mankind
unless tariffs be commensurately increased.

The directness, the swiftness and the ease with which
birds cleave the air, naturally excite man's desire. His
fancy has always given angels wings, and he has ever
dreamed of a time when the power of traversing those
unobstructed fields might also be his. That this triumph
is within the power of human ingenuity who in this age

36 PROTECTION OB FREE TRADE?

of marvels can doubt? And who would not hail with
delight the news that invention had at last brought to
realization the dream of ages, and made navigation of
the atmosphere as practicable as navigation of the ocean ?
Yet if the protective theory be true this mastery of
another element would be a misfortune to man. For it
would make protection impossible. Every inland town
and village, every rood of ground on the whole earth's
surface, would at once become a port of an all-embracing
ocean, and the only way in which any people could con-
tinue to enjoy the blessings of protection would be to
roof their country in.

It is not only improvements in transportation that are
antagonistic to protection ; but all labor-saving invention
and discovery. The utilization of natural gas bids fair
to lessen the demand for native coal far more than could
the free importation of foreign coal. Borings in Central
New York have recently revealed vast beds of pure salt,
the working of which will destroy the industry of salt-
making, to encourage which we impose a duty on foreign
salt. We maintain a tariff for the avowed purpose of
keeping out the products of cheap foreign labor; yet
machines are daily invented that produce goods cheaper
than the cheapest foreign labor. Clearly the only con-
sistent protectionism is that of China, which would not
only prohibit foreign commerce, but forbid the intro-
duction of labor-saving machinery.

The aim of protection, in short, is to prevent the
bringing into a country of things in themselves useful
and valuable, in order to compel the making of such
things. But what all mankind, in the individual affairs
of every-day life, regard as to be desired is not the
making of things, but the possession of things.

CHAPTER V.

THE PROTECTIVE UNIT.

more one considers the theory that every nation
ought to " protect " itself against every other
nation, the more inconsistent does it seem.

Is there not, in the first place, an obvious absurdity in
taking the nation or country as the protective unit and
saying that each should have a protective tariff f * What
is meant by nation or country in the protectionist theory
is an independent political division. Thus Great Britain
and Ireland are considered one nation, France another,

* That protectionist writers are themselves conscious of this
absurdity is to be seen in their constant effort to suggest the idea,
too preposterous to be broadly stated, that nations, instead of being
purely arbitrary political divisions of mankind, are natural, or di-
vinely appointed, divisions. Thus, not to multiply instances, Pro-
fessor Robert EUis Thompson ("Political Economy," p. 34) defines a
nation as " a people speaking one language, living under one govern-
ment, and occupying a continuous area. This area is a district whose
natural boundaries designate it as intended for the site of an inde-
pendent people." This definition is given in large type, while
underneath is appended in small type : "No one point of this defi-
nition is essential save the second." Yet in spite of this admission
that the "nation" is a purely arbitrary political division, Professor
Thompson endeavors throughout his book to suggest a different
impression to the mind of the reader, by talking of " the existence
of nations as parts of the world's providential order," the "provide**
Ml boundaries of nations/' etc.

37

38 PROTECTION OR FREE TRADE!

Germany another, Switzerland another, the United States,
Canada, Mexico, and each of the Central and South
American republics are others. But these divisions are
arbitrary. They do not coincide with any differences in
soil, climate, race or industry they have no maximum
or minimum of area or population. They are, moreover,
continually changing. The maps of Europe and America
used by school-children to-day are very different from
the maps their fathers used. The difference a hundred
years ago was greater yet; and as we go further back
still greater differences appear. According to this
theory, when the three British kingdoms had separate
governments it was necessary for the well-being of all
that they should be protected from each other, and
should Ireland achieve independence that necessity
would recur j but while the three countries are united
under one government, it does not exist. The petty
states of which a few years ago Germany and Italy con-
sisted ought upon this theory to have had, as they once
had, tariffs between them. Yet, now, upon the same
theory, they no longer need these tariffs. Alsace and
Lorraine when provinces of France needed to be pro-
tected against Germany. Now that they are German
provinces they need protection against France. Texas,
when part of Mexico, required a protective tariff against
the United States. Now, being a part of the United
States, it requires a protective tariff against Mexico. We
of the United States require a protective tariff against
Canada, and the Canadians a tariff against us, but if
Canada were to come into the Union the necessity for
both of these tariffs would disappear.

Do not these incongruities show that the protective
theory is destitute of scientific basis; that instead of
originating in any deduction from principles or induction
from facts, it has been invented merely to serve the pur-

THE PEOTECTIVE UNIT. 39

poses of its inventors ? Political changes in no wise alter
soil, climate or industrial needs. If the three British
kingdoms do not now need tariffs against one another,
they could not have needed them before the union. If it
is not injurious to the various states of Italy or Germany
to trade freely with each other now, it could not have
been injurious before they were united. If Alsace and
Lorraine are benefited by free trade with Germany now,
they would have been benefited by it when French prov-
inces. If the people of the opposite shores of the Great
Lakes and St. Lawrence River would not be injured by
the free exchange of their products should Canada enter
the American Union, they could not be injured by free-
dom to exchange their products now.

Consider how inconsistent with the protective theory
is the free trade that prevails between the States of the
American Union. Our Union includes an area almost as
large as Europe, yet the protectionists who hold that
each European country ought to protect itself against all
the rest make no objections to the free trade that exists
between the American States, though some of these
States are larger than European kingdoms, and the dif-
ferences between them, as to natural resources and indus-
trial development, are at least as great. If it is for the
benefit of Germany and Prance that they should be sepa-
rated by protective tariffs, does not New Jersey need the
protection of a tariff from New York and Pennsylvania?
and do not New York and Pennsylvania also need to be
protected from New Jersey ? And if New England needs
protection against the Province of Quebec, and Ohio,
Illinois and Michigan against the Province of Ontario, is
it not clear that these States also need protection from
the States which adjoin them on the south ? What dif-
ference does it make that one set of States belong to
the American Union and the other to the Canadian Con-

40 PROTECTION OB FREE TRADE?

federation! Industry and commerce, when left to them*
selves, pay no more attention to political lines than do
birds or fishes.

Clearly, if there is any truth in the protective theory it
must apply not only to the grand political divisions but
to all their parts. If a country ought not to import
from other countries anything which its own people can
produce, the same principle must apply to every sub-
division ; and each State, each county and each township
must need its own protective tariff.

And further than this, the proper application of the
protective theory requires the separation of mankind into
the smallest possible political divisions, each defended
against the rest by its own tariff. For the larger the
area of the protective unit, the more difficult does it
become to apply the protective theory. With every
extension of such countries as the United States the
possibility of protection, if it can be applied only to the
major political divisions, becomes less, and were the
poet's dream realized, and mankind united in a " Federa-
tion of the World/' the possibility of protection would
vanish. On the other hand, the smaller the protective
unit the better can the theory of protection be applied.
Protectionists do not go so far as to aver that all trade
is injurious. They hold that each country may safely
import what it cannot produce, but should restrict the
importation of what it can produce. Thus discrimina-
tion is required, which becomes more possible the smaller
the protective unit.

Upon protective principles the same tariff will no
better suit all the States of our Union than the same
sized shoes will fit all our sixty million people. Massa-
chusetts, for instance, does not produce coal, iron or
sugar. These, then, on protective principles, ought to
come into Massachusetts free, while Pennsylvania enjoyed

THE PROTECTIVE UNIT. 41

protection on iron and coal, and Louisiana on sugar.
Oranges may be grown in Florida, but not in Minnesota ;
therefore, while Florida needs a protective duty on
oranges, Minnesota does not. And so on through the
whole list of States. To "protect" them all with the
same tariff is to ignore as to each that part of the protec-
tive theory which permits the free importation of com-
modities that cannot be produced at home; and, by
compelling them to pay higher prices for what they
cannot produce, to neutralize the benefits arising from
the protection of such commodities as they do produce.

Furthermore, while Massachusetts, on the protective
theory, does not need protection on coal, iron and sugar,
which she cannot produce, she does need protection
against the beef, hogs and breadstuffs with which she is
"deluged" from the West to the injury of her agricul-
tural industries, and of which protection would enable
her to raise enough for her home consumption. On the
other hand, the West needs protection against the boots
and shoes and woolens of Massachusetts, so that Western
leather and wool could be worked up at home, instead of
being carried long distanced in raw form, to be brought
back in finished form. In the same way the iron-workers
of Ohio need protection against Pennsylvania more than
they do against England, while it is only mockery to
protect Rocky Mountain coal-miners against the coal of
Nova Scotia, British Columbia and Australia, which
cannot come into competition with them, while not pro-
tecting them against the coal of Iowa ; or to protect the
infant cotton-mills of the South against Old England
while giving them no protection against New England.

Upon the protective theory protection is most needed
against like industries. All protectionists agree that the
United States has greater need of protection against
Great Britain than against Brazil; and Canada against

42 PROTECTION OR FREE TRADE!

the United States than against India all agree that if
we must have free trade it should be with the countries
most widely differing as to their productions from our
own. Now there is far less difference between the pro-
ductions and productive capacities of New Hampshire
and Vermont, of Indiana and Illinois, or of Kansas and
Nebraska, than there is between the United States as a
whole and any foreign country. Therefore, on the pro-
tective theory, tariffs between these States are more
needed than between the United States and foreign
countries. And since adjoining townships differ less in
industrial capacities than adjoining States, they require
protective tariffs all the more.

The thirteen American colonies came together as thir-
teen independent sovereignties, each retaining the full
power of taxation, including that of levying duty on
imports, which was not given up by them until 1787,
eleven years after the Declaration of Independence, when
the Federal Constitution was adopted. If the protective
theory, then dominant in Great Britain, had at that time
had the hold upon the American people which it after-
wards obtained, it is certain that the power of protecting
themselves would never have been given up by the
States. And had the Union continued as at first formed,
or had the framers of the Constitution lacked the fore-
sight to prohibit State tariffs, there is no doubt that
when we came to imitate the British system of protec-
tion we should have had as strong a demand in the
various States for protection against other States as we
have had for protection against foreign countries, and
the arguments now used against free trade with foreign
countries would to-day be urged against free trade
between the States.

Nor can there be any doubt that if our political organi-
zation made our townships independent of one another,

THE PROTECTIVE UNIT. 43

we should have, in our townships and villages, the same
clamor for protection against the industries of other
townships and villages that we have now for the protec-
tion of the nation against other nations.

I am writing on Long Island, near the town of
Jamaica. I think I could make as good an argument to
the people of that little town as is made by the protec-
tionists to the people of the United States. I could say
to the shopkeepers of Jamaica, " Your townsmen now go
to New York when they want to purchase a suit of
clothes or a bill of dry-goods, leaving to you only the
fag-ends of their custom, while the farmers' wagons that
pass in a long line over the turnpike every night, carry-
ing produce to New York and Brooklyn, bring back sup-
plies the next day. A protective tariff will compel these
purchases to be made here. Thus profits that now go to
New York and Brooklyn will be retained in Jamaica;
you will want larger stores and better houses, can pay
your clerks and journeymen higher wages, will need
more banking accommodations, will advertise more
freely in Jamaican newspapers, and thus will the town
grow and prosper."

"Moreover," I might say, "what a useless waste of
labor there is in carrying milk and butter, chickens, eggs
and vegetables to New York and Brooklyn and bringing
back other things. How much better for our farmers if
they had a home market. This we can secure for them
by a tariff that will protect Jamaican industries against
those of New York and Brooklyn. Clothing, cigars,
boots and shoes, agricultural implements and furniture
may be manufactured here as well as in those cities.
Why should we not have a cotton-factory, a woolen-mill,
a foundry, and, in short, all the establishments necessary
to supply the wants of our people! To get them we
need only a protective tariff. Capital, when assured of

44 PROTECTION OB FREE TRADE?

protection, will be gladly forthcoming for such enter-
prises, and we shall soon be exporting what we now
import, while our farmers will find a demand at their
doors for all their produce. Even if at first they do
have to pay somewhat higher prices for what they buy
they will be much more than compensated by the higher
prices they will get for what they sell, and will save an
eight- or ten-mile haul to Brooklyn or New York. Thus,
instead of Jamaica remaining a little village, the indus-
tries which a protective tariff will build up here will
make it a large town, while the increased demand for
labor will make wages higher and employment steadier."

I submit that all this is at least as valid as the protec-
tive arguments that are addressed to the people of the
whole United States, and no one who has listened to the
talk of village shopkeepers or noticed the comments of
local newspapers can doubt that were our townships
independent, village protectionists could get as ready a
hearing as national protectionists do now.

But to follow the protective theory to its logical con-
clusions we cannot stop with protection between State
and State, township and township, village and village.
If protection be needful between nations, it must be
needful not only between political sub-divisions, but
between family and family. If nations should never buy
of other nations what they might produce at home, the
same principle must forbid each family to buy anything
it might produce. Social laws, like physical laws, must
apply to the molecule as well as to the aggregate. But
a social condition in which the principle of protection
was thus fully carried out would be a condition of utter
barbarism.

CHAPTER VI.

TRADE.

PROTECTION implies prevention. To protect is to
preserve or defend.

What is it that protection by tariff prevents? It is
trade. To speak more exactly, it is that part of trade
which consists in bringing in from other countries com-
modities that might be produced at home.

But trade, from which "protection" essays to preserve
and defend us, is not, like flood, earthquake, or tornado,
something that comes without human agency. Trade
implies human action. There can be no need of preserv-
ing from or defending against trade, unless there are
men who want to trade and try to trade. Who, then,
are the men against whose efforts to trade "protection 11
preserves and defends us ?

If I had been asked this question before I had come to
think over the matter for myself, I should have said that
the men against whom "protection" defends us are
foreign producers who wish to sell their goods in our
home markets. This is the assumption that runs
through all protectionist arguments the assumption
that foreigners are constantly trying to force their prod-
ucts upon us, and that a protective tariff is a means for
defending ourselves against what they want to do.

Yet a moment's thought will show that no effort of
foreigners to sell us their products could of itself make a

45

46 PROTECTION OB FREE TRADE f

tariff necessary. For the desire of one party, however
strong it may be, cannot of itself bring about trade. To
every trade there must be two parties who mutually
desire to trade, and whose actions are reciprocal. No
one can buy unless he can find some one willing to sell ;
and no one can sell unless there is some other one will-
ing to buy. If Americans did not want to buy foreign
goods, foreign goods could not be sold here even if there
were no tariff. The efficient cause of the trade which
our tariff aims to prevent is the desire of Americans to
buy foreign goods, not the desire of foreign producers to
sell them. Thus protection really prevents what the
"protected" themselves want to do. It is not from
foreigners that protection preserves and defends us; it
is from ourselves.

Trade is not invasion. It does not involve aggression
on one side and resistance on the other, but mutual con-
sent and gratification. There cannot be a trade unless
the parties to it agree, any more than there can be a
quarrel unless the parties to it differ. England, we say,
forced trade with the outside world upon China, and the
United States upon Japan. But, in both cases, what was
done was not to force the people to trade, but to force
their governments to let them. If the people had not
wanted to trade, the opening of the ports would have
been useless.

Civilized nations, however, do not use their armies and
fleets to open one another's ports to trade. What they
use their armies and fleets for, is, when they quarrel, to
close one another's ports. And their effort then is to
prevent the carrying in of things even more than the
bringing out of things importing rather than exporting.
For a people can be more quickly injured by preventing
them from getting things than by preventing them from
sending things away. Trade does not require force.

TRADE. 47

Free trade consists simply in letting people buy and sell
as they want to buy and sell. It is protection that
requires force, for it consists in preventing people from
doing what they want to do. Protective tariffs are as
much applications of force as are blockading squadrons,
and their object is the same to prevent trade. The
difference between the two is that blockading squadrons
are a means whereby nations seek to prevent their
enemies from trading; protective tariffs are a means
whereby nations attempt to prevent their own people
from trading. What protection teaches us, is to do to
ourselves in time of peace what enemies seek to do to us
in time of war.

Can there be any greater misuse of language than to
apply to commerce terms suggesting strife, and to talk
of one nation invading, deluging, overwhelming or inun-
dating another with goods ? Goods ! what are they but
good things things we are all glad to get? Is it not
preposterous to talk of one nation forcing its good things
upon another nation ? Who individually would wish to
be preserved from such invasion ? Who would object to
being inundated with all the dress-goods his wife and
daughters could want ; deluged with a horse and buggy ;
overwhelmed with clothing, with groceries, with good
cigars, fine pictures, or anything else that has value f
And who would take it kindly if any one should assume
to protect him by driving off those who wanted to bring
him such things ?

In point of fact, however, not only is it impossible for
one nation to sell to another, unless that other wants to
buy, but international trade does not consist in. sending
out goods to be sold. The great mass of the imports of
every civilized country consists of goods that have been
ordered by the people of that country and are imported
at their risk. This is true even in our own case,

48 PROTECTION OB FREE TRADE!

although one of the effects of our tariff is that many
goods that otherwise would be imported by Americans
are sent here by European manufacturers, because
undervaluation is thus made easier.

But it is not the importer who is the cause of importa-
tion. Whether goods are brought here by American
importers or sent here by foreign exporters, the cause of
their coming here is that they are asked for by the
American people. It is the demand of purchasers at
retail that causes goods to be imported. Thus a protec-
tive tariff is a prevention by a people not of what others
want to do to them, but of what they themselves want
to do.

When in the common use of the word we speak of
individuals or communities protecting themselves, there
is always implied the existence of some external enemy
or danger, such as cold, heat or accident, savage beasts
or noxious vermin, fire or disease, robbers or invaders;
something disposed to do what the protected object to.
The only cases in which the common meaning of the
word does not imply some external enemy or danger are
those in which it implies some protector of superior
intelligence, as when we speak of imbeciles, lunatics,
drunkards or young children being protected against
their own irrational acts.

But the systems of restriction which their advocates
have named " protective " lack both the one and the other
of these essential qualities of real protection. What
they defend a people against is not external enemies or
dangers, but what that people themselves want to do.
Yet this "protection" is not the protection of a superior
intelligence, for human wit has not yet been able to
devise any scheme by which any intelligence can be
secured in a Parliament or Congress superior to that of
the people it represents.

TRADE. 49

That where protective tariffs are imposed it is in
accordance with the national will I do not deny. What
I wish to point out is that even the people who thus
impose protective tariffs upon themselves still want to do
what by protective tariffs they strive to prevent them-
selves from doing. This is seen in the tendency of
importation to continue in spite of tariffs, in the disposi-
tion of citizens to evade their tariff whenever they can,
and in the fact that the very same individuals who
demand the imposition of tariffs to prevent the importa-
tion of foreign commodities are among the individuals
whose demand for those commodities is the cause of
their importation. Given a people of which every man,
woman and child is a protectionist, and a tariff unani-
mously agreed upon, and still that tariff will be a restric-
tion upon what these people want to do and will still try
to do. Protectionists are only protectionists in theory
and in politics. When it comes to buying what they
want all protectionists are free traders. I say this to
point out not the inconsistency of protectionists, but
something more significant.

"I write." "I breathe." Both propositions assert
action on the part of the same individual, but action of
different kinds. I write by conscious volition ; I breathe
instinctively. I am conscious that I breathe only when
I think of it. Yet my breathing goes on whether I think
of it or not when my consciousness is absorbed in
thought, or is dormant in sleep. Though with all my
will I try to stop breathing, I yet, in spite of myself, try
to breathe, and will continue that endeavor while life
lasts. Other vital functions are even further .beyond
consciousness and will. We live by the continuous car-
rying on of multifarious and delicate processes apparent
only in their results and utterly irresponsive to mental
direction.

60 PROTECTION OB FREE TRADE?

Between the man and the community there is in these
respects an analogy which becomes closer as civilization
progresses and social relations grow more complex. That
power of the whole which is lodged in governments is
limited in its field of consciousness and action much as
the conscious will of the individual is limited, and even
that consensus of personal beliefs and wishes termed
public opinion is but little wider in its range. There is,
beyond national direction and below national conscious-
ness, a life and relation of parts and a performance of
functions which are to the social body what the vital
processes are to the physical body.

What would happen to the individual if all the func-
tions of the body were placed under the control of the
consciousness, and a man could forget to breathe, or
miscalculate the amount of gastric juice needed by his
stomach, or blunder as to what his kidneys should take
from the blood, is what would happen to a nation in
which all individual activities were directed by govern-
ment.

And though a people collectively may institute a tariff
to prevent trade, their individual wants and desires will
still force them to try to trade, just as when a man ties a
ligature round his arm, his blood will still try to circulate.
For the effort of each to satisfy his desires with the
least exertion, which is the motive of trade, is as instinc-
tive and persistent as are the instigations which the vital
organs of the body obey. It is not the importer and the
exporter who are the cause of trade, but the daily and
hourly demands of those who never think of importing
or exporting, and to whom trade carries that which they
demand, just as the blood carries to each fiber of the
oody that for which it calls.

It is as natural for men to trade as it is for blood to
circulate. Man is by nature a trading animal, impelled

TRADE. 51

to trade by persistent desires, placed in a world where
everything shows that he was intended to trade, and
finding in trade the possibility of social advance. With-
out trade man would be a savage.

Where each family raises its qwn food, builds its own
house, makes its own clothes and manufactures its own
tools, no one can have more than the barest necessaries
of life, and every local failure of crops must bring famine.
A people living in this way will be independent, but their
independence will resemble that of the beasts. They will
be poor, ignorant, and all but powerless against the
forces of nature and the vicissitudes of the seasons.

This social condition, to which the protective theory
would logically lead, is the lowest in which man is ever
found the condition from which he has toiled upward
He has progressed only as he has learned to satisfy his
wants by exchanging with his fellows and has freed and
extended trade. The difference between naked savages
possessed of only the rudiments of the arts, cowering in
ignorance and weakness before the forces of nature, and
the wealth,the knowledge and the power of our highest civi-
lization, is due to the exchange of the independence which
is the aim of the protective system, for that interdepen-
dence which comes with trade. Men cannot apply them-
selves to the production of but one of the many things
human wants demand unless they can exchange their
products for the products of others. And thus it is only
as the growth of trade permits the division of labor that,
beyond the merest rudiments, skill can be developed,
knowledge acquired and invention made ; and that pro-
ductive power can so gain upon the requirements for
maintaining life that leisure becomes possible and capital
can be accumulated.

If to prevent trade were to stimulate industry and
promote prosperity, then the localities where he was most

52 PROTECTION OR FREE TRADE!

isolated would show the first advances of man. The
natural protection to home industry afforded by rugged
mountain-chains, by burning deserts, or by seas too wide
and tempestuous for the frail bark of the early mariner,
would have given us the first glimmerings of civilization
and shown its most rapid growth. But, in fact, it is
where trade could best be carried on that we find wealth
first accumulating and civilization beginning. It is on
accessible harbors, by navigable rivers and much-traveled
highways that we find cities arising and the arts and
sciences developing. And as trade becomes free and
extensive as roads are made and navigation improved ;
as pirates and robbers are extirpated and treaties of peace
put an end to chronic warfare so does wealth augment
and civilization grow. All our great labor-saving inven-
tions, from that of money to that of the steam-engine,
spring from trade and promote its extension. Trade has
ever been the extinguisher of war, the eradicator of pre-
judice, the diffuser of knowledge. It is by trade that
useful seeds and animals, useful arts and inventions,
have been carried over the world, and that men in one
place have been enabled not only to obtain the products,
but to profit by the observations, discoveries and inven-
tions of men in other places.

In a world created on protective principles, all habi-
table parts would have the same soil and climate, and be
fitted for the same productions, so that the inhabitants
of each locality would be able to produce at home all
they required. Its seas and rivers would not lend them-
selves to navigation, and every little section intended for
the habitation of a separate community would be guarded
by a protective mountain-chain. If we found ourselves
in such a world, we might infer it to be the intent of
nature that each people should develop its own indus-
tries independently of all others. But the world in

TRADE. 53

which we do find ourselves is not merely adapted to
intercommunication, but what it yields to man is so dis-
tributed as to compel the people of different localities to
trade with each other to satisfy fully their desires. The
diversities of soil and climate, the distribution of water,
wood and mineral deposits, the currents of sea and air,
produce infinite differences in the adaptation of different
parts to different productions. It is not merely that one
zone yields sugar and coffee, the banana and the pine-
apple, and another wheat and barley, the apple and the
potato ; that one supplies furs and another cotton ; that
here are hillsides adapted to pasture and there valleys
fitted for the plow j here granite and there clay ; in one
place iron and coal and in another copper and lead ; but
that there are differences so delicate that, though experi-
ence tells us they exist, we cannot say to what they are
due. Wine of a certain quality is produced in one place
which cuttings from the same vines will not yield in
another place, though soil and climate seem alike. Some
localities, without assignable reason, become renowned
for productions of one kind and some for productions of
another kind; and experience often shows that plants
thrive differently in different parts of the same field.
These endless diversities, in the adaptation of different
parts of the earth's surface to the production of the
different things required by man, show that nature has
not intended man to depend for the supply of his wants
upon his own production, but to exchange with his fel-
lows, just as the placing of the meat before one guest at
table, the vegetable? before another, and the bread before
another, shows the intent of the host that they should
help one another.

Other natural facts have similar bearing. It has long
been known that to obtain the best crops the farmer
should not sow with seed grown in his own fields, but

54 PROTECTION OB FREE TRADE!

with seed brought from afar. The strain of domestic
animals seems always improved by imported stock, even
poultry-breeders finding it best to sell the male birds
they raise and supply their places with cocks brought
from a distance. Whether or not the same law holds
true with regard to the physical part of man, it is certain
that the admixture of peoples produces stimulating mental
effects. Prejudices are worn down, wits are sharpened,
language enriched, habits and customs brought to the
test of comparison and new ideas enkindled. The most
progressive peoples, if not always of mixed blood, have
always been the peoples who came most in contact with
and learned most from others. " Home-keeping youths
have ever homely wits " is true of nations.

And, further than this, it is characteristic of all the in-
ventions and discoveries that are so rapidly increasing our
power over nature that they require the greater division
of labor, and extend trade. Thus every step in advance
destroys the independence and increases the interdepen-
dence of men. The appointed condition of human progress
is evidently that men shall come into closer relations and
become more and more dependent upon each other.

Thus the restrictions which protectionism urges us to
impose upon ourselves are about as well calculated to
promote national prosperity as ligatures, that would
impede the circulation of the blood, would be to promote
bodily health and comfort. Protection calls upon us to
pay officials, to encourage spies and informers, and to
provoke fraud and perjury, for what? Why, to preserve
ourselves from and protect ourselves against something
which offends no moral law ; something to which we are
instinctively impelled; something without which we
could never have emerged from barbarism, and some-
thing which physical nature and social laws alike prove
to be in conformity with the creative intent.

TRADE. 55

It is true that protectionists do not condemn all trade,
and though some of them have wished for an ocean of
fire to bar out foreign products, others, more reasonable
if less logical, would permit a country to import things it
cannot produce. The international trade which they
concede to be harmless amounts not to a tenth and per-
haps not to a twentieth of the international trade of the
world, and, so far as our own country is concerned, the
things we could not obtain at home amount to little
more than a few productions of the torrid zone, and even
these, if properly protected, might be grown at home by
artificial heat, to the incidental encouragement of the
glass and coal industries. But, so far as the correctness
of the theory goes, it does not matter whether the trade
which " protection n would permit, as compared with that
it would prevent, be more or less. What " protection "
calls on us to preserve ourselves from, and guard our,
selves against, is trade. And whether trade be between
citizens of the same nation or citizens of different
nations, and whether we get by it things that we could
produce for ourselves or things that we could not pro-
duce for ourselves, the object of trade is always the
same. If I trade with a Canadian, a Mexican, or an
Englishman it is for the same reason that I trade with
an American that I would rather have the thing he
gives me than the thing I give him. Why should I
refuse to trade with a foreigner any more than with a
fellow-citizen when my object in trading is my advan-
tage, not his ? And is it not in the one case, quite as
much as in the other, an injury to me that my trade
should be prevented? What difference does it make
whether it would be possible or impossible for me to
make for myself the thing for which I trade? If I did
not want the thing I am to get more than the thing I am
to give, I would not wish to make the trade. Here is a

56 PROTECTION OB FEEE TRADE?

farmer who proposes to exchange with his neighbor a
horse he does not want for a couple of cows he does
want. Would it benefit these farmers to prevent this
trade on the ground that one might breed his own horses
and the other raise his own cows? Yet if one farmer
lived on the American and the other lived on the Cana-
dian side of the line this is just what both the American
and Canadian governments would do. And this is
called "protection."

It is only one of the many benefits of trade that it
enables people to obtain what the natural conditions of
their own localities would not enable them to produce.
This is, however, so obvious a benefit that protectionists
cannot altogether ignore it, and a favorite doctrine with
American protectionists is that trade ought to follow
meridians of longitude instead of parallels of latitude,
because the great differences of climate and consequently
of natural productions are between north and south.*
The most desirable reconstruction of the world on this
theory would be its division into "countries" consisting
of narrow strips running from the equator to the poles,
with high tariffs on either side and at the equatorial end,
for the polar ice would serve the purpose at the other.
But in the meantime, despite this notion that trade
ought to be between north and south rather than
between east and west, the fact is that the great com-
merce of the world is and always has been between east
and west. And the reason is clear. It is that peoples

* "This, then, is our position respecting commerce . . . that it
should interchange the productions of diverse zones and climates,
following in its transoceanic voyages lines of longitude of tener than
lines of latitude." HORACE GREELEY, Political Economy, p. 39.

11 Legitimate and natural commerce moves rather along the merid-
ians than along the parallels of latitude." PROFESSOR ROBERT
ELLIS THOMPSON, Political Economy, p. 217.

TRADE. 67

most alike in habits and needs will call most largely for
each other's productions, and that the course of migra-
tion and of assimilating influences has been rather
between east and west than between north and south.

Difference in latitude is but one element of difference
in climate, and difference in climate is but one element
of the endless diversity in natural productions and capa-
cities. In no one place will nature yield to labor all that
man finds useful. Adaptation to one class of products
involves non-adaptation to others. Trade, by permitting
us to obtain each of the things we need from the locality
best fitted for its production, enables us to utilize the
highest powers of nature in the production of them all,
and thus to increase enormously the sum of various
things which a given quantity of labor expended in any
locality can secure.

But, what is even more important, trade also enables
us to utilize the highest powers of the human factor in
production. All men cannot do all things equally well.
There are differences in physical and mental powers
which give different degrees of aptitude for different parts
of the work of supplying human needs. And far more
important still are the differences that arise from the
development of special skill. By devoting himself to one
branch of production a man can acquire skill which
enables him, with the same labor, to produce enormously
more than one who has not made that branch his spe-
cialty. Twenty boys may have equal aptitude for any one
of twenty trades, but if every boy tries to learn the
twenty trades, none of them can become a good workman
in any ; whereas, if each devotes himself to one .trade, all
may become good workmen. There will not only be a
saving of the time and effort required for learning, but
each, moreover, can in a single vocation work to much
better advantage, and may acquire and use tools which

58 PROTECTION OE FREE TBADET

it would be impossible to obtain and employ did each
attempt the whole twenty.

And as there are differences between individuals which
fit them for different branches of production, so, but to a
much greater degree, are there such differences between
communities. Not to speak again of the differences due
to situation and natural facilities, some things can be
produced with greater relative advantage where popula-
tion is sparse, others where it is dense, and differences in
industrial development, in habits, customs and related
occupations, produce differences in relative adaptation.
Such gains, moreover, as attend the division of labor
between individuals, attend also the division of labor
between communities, and lead to that localization of
industry which causes different places to become noted
for different industries. Wherever the production of
some special thing becomes the leading industry, skill is
more easily acquired, and is carried to a higher pitch,
supplies are most readily procured, auxiliary and correl-
ative occupations grow up, and a larger scale of produc-
tion leads to the employment of more efficient methods.
Thus in the natural development of society trade brings
about differentiations of industry between communities
as between individuals, and with similar benefits.

Men of different nations trade with each other for the
same reason that men of the same nation do because
they find it profitable; because they thus obtain what
they want with less labor than they otherwise could.
Goods will not be imported into any country unless they
can be obtained more easily by producing something else
and exchanging it for them, than by producing them
directly. And hence, to restrict importations must be to
lessen productive power and reduce the fund from which
all revenues are drawn.

Any one can see what would be the result of forbidding
each individual to obtain from another any commodity

TRADE. 69

or service which he himself was naturally fitted to pro-
duce or perform. Such a regulation, were any govern-
ment mad enough to adopt it and powerful enough to
maintain it, would paralyze the forces that make civiliza-
tion possible and soon convert the most populous and
wealthy country into a howling wilderness. The restric-
tions which protection would impose upon foreign trade
differ only in degree, not in kind, from such restrictions
as these. They would not reduce a nation to barbarism,
because they do not affect all trade, and rather hamper
than prohibit the trade they do affect; but they must
prevent the people that adopt them from obtaining the
abundance they might otherwise enjoy. If the end of
labor be, not the expenditure of effort, but the securing
of results, then whether any particular thing ought to be
obtained in a country by home production, or by impor-
tation, depends solely upon which mode of obtaining it
will give the largest result to the least labor. This is
a question involving such complex considerations that
what any country ought to obtain in this way or in that
cannot be settled by any Congress or Parliament. It can
safely be left only to those sure instincts which are to
society what the vital instincts are to the body, and which
always impel men to take the easiest way open to them
to reach their ends.

When not caused by artificial obstacles, any tendency
in trade to take a certain course is proof that it ought to
take that course, and restrictions are harmful because
they restrict, and in proportion as they restrict. To
assert that the way for men to become healthy and
strong is for them to force into their stomachs what
nature tries to reject, to regulate the play of their lungs
by bandages, or to control the circulation of their blood
by ligatures, would be not a whit more absurd than to
assert that the way for nations to become rich is for
them to restrict the natural tendency to trade.

CHAPTER VII.

PRODUCTION AND PRODUCERS.

REMOTE from neighbors, in a part of the country
where population is only beginning to come, stands
the rude house of a new settler. As the stars come out,
a ruddy light gleams from the little window. The
housewife is preparing a meal. The wood that burns so
cheerily was cut by the settler, the flour now turning
into bread is from wheat of his raising; the fish hiss-
ing in the pan were caught by one of the boys, and the
water bubbling in the kettle, in readiness to be poured
on the tea, was brought from the spring by the eldest
girl before the sun had set.

The settler cut the wood. But it took more than that
to produce the wood. Had it been merely cut, it would
still be lying where it fell. The labor of hauling it was
as much a part of its production as the labor of cutting
it. So the journey to and from the mill was as necessary
to the production of the flour as the planting and reaping
of the wheat. To produce the fish the boy had to walk
to the lake and trudge back again. And the production
of the water in the kettle required not merely the exer-
tion of the girl who brought it from the spring, but also
the sinking of the barrel in which it collected, and the
making of the bucket in which it was carried.

As for the tea, it was grown in China, was carried on
a bamboo pole upon the shoulders of a man to some river

60

PRODUCTION AND PRODUCERS. 61

village, and sold to a Chinese merchant, who shipped it
by boat to a treaty port. There, having been packed for
ocean transportation, it was sold to the agency of some
American house, and sent by steamer to San Francisco.
Thence it passed by railroad, with another transfer of
ownership, into the hands of a Chicago jobber. The
jobber, in turn, in pursuance of another sale, shipped it
to the village storekeeper, who held it so that the settler
might get it when and in such quantities as he pleased,
just as the water from the spring is held in the sunken
barrel so that it may be had when needed.

The native dealer who first purchased this tea of the
grower, the merchant who shipped it across the Pacific,
the Chicago jobber who held it as in a reservoir until the
storekeeper ordered it, the storekeeper who, bringing it
from Chicago to the village, held it as in a smaller reser-
voir until the settler came for it, as well as those con-
cerned in its transportation, from the coolie who carried
it to the bank of the Chinese river to the brakemen of
the train that brought it from Chicagowere they not
all parties to the production of that tea to this family as
truly as were the peasants who cultivated the plant and
gathered its leaves ?

The settler got the tea by exchanging for it money
obtained in exchange for things produced from nature
by the labor of himself and his boys. Has not this tea,
then, been produced to this family by their labor as truly
as the wood, the flour or the water? Is it not true that
the labor of this family devoted to producing things
which were exchanged for tea has really produced tea,
even in the sense of causing it to be grown, cured and
transported ? It is not the growing of the tea in China
that causes it to be brought to the United States. It is
the demand for tea in the United States that is to say,
the readiness to give other products of labor for it that

62 PBOTECTION OB FBEE TRADE T

causes tea to be grown in China for shipment to the
United States.

To produce is to bring forth, or to bring to. There is
no other word in our language which includes at once
all the operations, such as catching, gathering, extracting,
growing, breeding or making, by which human labor
brings forth from nature, or brings to conditions adapted
to human uses, the material things desired by men and
which constitute wealth. When, therefore, we wish to
speak collectively of the operations by which things are
secured, or fitted for human use, as distinguished from
operations which consist in moving them from place to
place or passing them from hand to hand after they have
been so secured or fitted, we are obliged to use the word
production in distinction from transportation or exchange.
But we should always remember that this is but a nar-
row and special use of the word.

While in conformity with the usages of our language
we may properly speak of production as distinguished
from transportation and exchange, just as we may prop-
erly speak of men as distinguished from women and
children, yet in its full meaning, production includes
transportation and exchange, just as men includes
women and children. In the narrow meaning of the
word we speak of coal as having been produced when it
has been moved from its place in the vein to the surface
of the ground; but evidently the moving of the coal
from the mouth of the mine to those who are to use it is
as necessary a part of coal production, in the full sense,
as is the bringing of it to the surface. And while we
may produce coal in the United States by digging it out
of the ground, we may also just as truly produce it by
exchanging other products of labor for it. Whether we
get coal by digging it or by bringing it from Nova
Scotia or Australia or England in exchange for other

PRODUCTION AND PRODUCERS. 63

products of our labor, it is, in the one case as truly as in
the other, produced here by our labor.

Through all protectionist arguments runs the notion
that transporters and traders are non-producers, whose
support lessens the amount of wealth which other classes
can enjoy.* This is a short-sighted view. In the full
sense of the term transporters and traders are as truly
producers as are miners, farmers or manufacturers, since
the transporting of things and the exchanging of things
are as necessary to the enjoyment of things as is extract-
ing, growing or making. There are some operations
conducted under the forms of trade that are in reality
gambling or blackmailing, but this does not alter the
fact that real trade, which consists in exchanging and
transporting commodities, is a part of production -a part
so necessary and so important that without it the other
operations of production could only be carried on in the
most primitive manner and with the most niggard
results.

And not least important of the functions of the trader
is that of holding things in stock, so that those who wish
to use them may be able to get them at such times and
places, and in such quantities, as are most convenient.
This is a service analogous to that performed by the
sunken barrel which holds the water of a spring so that
it can be had by the bucketful when needed, or by the

* "In my conception, the chief end of a true political economy is
the conversion of idlers and useless exchangers and traffickers into
habitual, effective producers of wealth." HORACE GREELEY, Politi*
cal Economy, p. 29.

The trader "adds nothing to the real wealth of society. He
neither directs and manages a vital change in the form of matter
as does the farmer, nor a chemical and mechanical change in form as
does the manufacturer. He merely transfers things from the place
of their production to the place of demand.' 1 PROFESSOR R. E.
THOMPSON, Political Economy, p. 198.

64 PROTECTION OB FREE TRADE!

reservoirs and pipes which enable the inhabitant of a city
to obtain water by the turning of a faucet. The profits
of traders and "middlemen" may sometimes be exces-
sive (and anything which hampers trade and increases
the capital necessary to carry it on tends to make them
excessive), but they are in reality based upon the per-
formance of services in holding and distributing things
as well as in transporting things.

When Charles Fourier was young [says Professor Thompson
(Political Economy, p. 199)], he was on a visit to Paris, and priced at
a street stall some apples of a sort that grew abundantly in his
native province. He was amazed to find that they sold for many
times the sum they would bring at home, having passed through the
hands of a host of middlemen on their way from the owner of the
orchard to the eater of the fruit. The impression received at that
instant never left him ; it gave the first impulse to his thinking out
his socialistic scheme for the reconstruction of society, in which
among other sweeping changes the whole class of traders and their
profits are to be abolished.

This story, quoted approvingly to convey an idea that
the trader is a mere toll-gatherer, simply shows what a
superficial thinker Fourier was. If he had undertaken
to bring with him to Paris a supply of apples and to
carry them around with him so that he could have one
when he felt like it he would have formed a much truer
idea of what he was really paying for in the increased
price. That price included not merely the cost of the
apple at its place of growth, plus the cost of transporting
it to Paris, the octroi at the Paris gates,* the loss of dam-
aged apples, and remuneration for the service and capital
of the wholesaler, who held the apples in stock until the

* The octroi, or municipal tariff on produce brought into a town,
is still levied in France, though abolished for a time by the Revolu-
tion. It is a survival of the local tariffs once common in Europe,
which separated province from province and town from country.

PRODUCTION AND PRODUCERS. 65

vender chose to take them, but also payment to the
vender, for standing all day in the streets of Paris, in
order to supply a few apples to those who wanted an
apple then and there.

So when I go to a druggist's and buy a small quantity
of medicine or chemicals I pay many times the original
cost of those articles, but what I thus pay is in much
larger degree wages than profit. Out of such small sales
the druggist must get not only the cost of what he sells
me, with other costs incidental to the business, but also
payment for his services. These services consist not
only in the actual exertion of giving me what I want,
but in waiting there in readiness to serve me when I
choose to come. In the price of what he sells me he makes
a charge for what printers call " waiting time." And he
must manifestly not merely charge "waiting time" for
himself, but also for the stock of many different things
only occasionally called for, which he must keep on
hand. He has been waiting there, with his stock, in
anticipation of the fact that such persons as myself, in
sudden need of some small quantities of drugs or chemi-
cals, would find it cheaper to pay him many times their
wholesale cost than to go farther and buy larger quanti-
ties. What I pay him, even when it is not payment for
the skilled labor of compounding, is largely a payment
of the same nature as, were he not there, I might have
had to make to a messenger.

If each consumer had to go to the producer for the
small quantities individually demanded, the producer
would have to charge a higher price on account of the
greater labor and expense of attending to such small

Colbert, the first Napoleon, and the German Zollverein did much in
reducing and abolishing these restrictions to trade, producing in
this way good results which are sometimes attributed by protec-
tionists to external tariffs.

66 PROTECTION OB FREE TRADE?

transactions. A hundred cases of shoes may be sold at
wholesale in less time than would be consumed in suiting
a customer with a single pair. On the other hand, the
going to the producer direct would involve an enormous
increase of cost and trouble to the consumer, even when
such a method of obtaining things would not be utterly
impossible.

What " middlemen " do is to save to both parties this
trouble and expense, and the profits which competition
permits them to charge in return are infinitesimal as
compared with the enormous savings effected are like
the charge made to each consumer for the cost of the
aqueducts, mains and pumping-engines of a great system
of water-supply as compared with the cost of providing
a separate system for each house.

And further than this, these middlemen between pro-
ducer and consumer effect an enormous economy in the
amount of commodities that it is necessary to keep in
stock to provide for a given consumption, and conse-
quently vastly lessen the loss from deterioration and
decay. Let any one consider what amount of stores
would be needed to keep in their accustomed supply
even for a month a family used to easy access to those
handy magazines of commodities which retail dealers
maintain. He will see at once that there are a number
of things such as fresh meat, fish, fruits, etc., which it is
impossible to keep on hand, so as to be sure of having
them when needed. And of the things that would keep
longer, such as flour, sugar, oil, etc., he will see that but
for the retail dealer it would be necessary that much
greater quantities should be kept in each house, with a
much greater liability to loss from decay or accident.
But it is when he comes to things not constantly needed,
but which, when needed, though it may not be once a
year or once a lifetime, may be needed very badly that

PRODUCTION AND PRODUCERS. 67

he will realize fully how the much-abused "middleman 11
economizes the capital of society and increases the oppor-
tunities of its members.

A retail dealer is called by the English a " shopkeeper"
and by the Americans a " storekeeper." The American
usage best expresses his real function. He is in reality
a keeper of stores which otherwise his customers would
have to keep on hand for themselves, or go without.
The English speak of the shops of cooperative supply
associations as " stores/' since it is in them that the vari-
ous things required from time to time by the members of
those associations are stored until called for. But this
is precisely what, without any formal association, the
retail dealer does for those who buy of him. And
though cooperative purchasing associations have to a
certain extent succeeded in England (they have generally
failed in the United States) there can be no question that
the functions of keeping things in store and distributing
them to consumers as needed are on the whole performed
more satisfactorily and more economically by self-
appointed store- or stock-keepers than they could be as
yet by formal associations of consumers. And the ten-
dencies of the time to economies in the distribution as
well as in the production of commodities, are bringing
about through the play of competition just such a saving
of expense to the consumer as is aimed at by cooperative
supply associations.

That in civilized society to-day there seem to be too
many storekeepers and other distributors is quite true.
But so there seem to be too many professional men, too
many mechanics, too many farmers, and too many
laborers. What may be the cause of this most curious
state of things it may hereafter lie in our way to inquire,
but at present I am only concerned in pointing out that
the trader is not a mere "useless exchanger," who "adds

68 PROTECTION OB FREE TRADE!

nothing to the real wealth of society/' but that the trans*
porting, storing and exchanging of things are as neces-
sary a part of the work of supplying human needs as is
growing, extracting or making.

Nor should it be forgotten that the investigator, the
philosopher, the teacher, the artist, the poet, the priest,
though not engaged in the production of wealth, are not
only engaged in the production of utilities and satisfac-
tions to which the production of wealth is only a means,
but by acquiring and diffusing knowledge, stimulating
mental powers and elevating the moral sense, may
greatly increase the ability to produce wealth. For man
does not live by bread alone. He is not an engine, in
which so much fuel gives so much power. On a capstan
bar or a topsail halyard a good song tells like muscle,
and a " Marseillaise " or a " Battle Hymn of the Repub-
lic" counts for bayonets. A hearty laugh, a noble
thought, a perception of harmony, may add to the power
of dealing even with material things.

He who by any exertion of mind or body adds to the
aggregate of enjoyable wealth, increases the sum of
human knowledge or gives to human life higher eleva-
tion or greater fullness he is, in the large meaning of
the words, a " producer/' a "working-man," a "laborer,"
and is honestly earning honest wages. But he who
without doing aught to make mankind richer, wiser,
better, happier, lives on the toil of others he, no matter
by what name of honor he may be called, or how lustily
the priests of Mammon may swing their censers before
him, is in the last analysis but a beggar-man or a thief.

CHAPTER VIIL

TARIFFS FOR REVENUE.

rPAEIFFS may embrace duties on exports as well as
JL on imports; but duties on exports are prohibited
by the Constitution of the United States and are now
levied only by a few countries, such as Brazil, and by
them only on a few articles. The tariff, as we have to
consider it, is a schedule of taxes upon imports.

The word "tariff" is said to be derived from the
Spanish town of Tarif a, near Gibraltar, where the Moors
in the days of their power collected duties, probably
much after the manner of those Chinese local custom-
houses called " squeeze stations." But the thing is older
than the name. Augustus Caesar levied duties on imports
into Italy, and there were tariffs long before the Caesars.

The purpose in which tariffs originate is that of raising
revenue. The idea of using them for protection is an
afterthought. And before considering the protective
function of tariffs it will be well to consider them as a
means for collecting revenue.

It is usually assumed, even by the opponents of protec-
tion, that tariffs should be maintained for revenue.
Most of those who are commonly called free traders
might more properly be called revenue-tariff men. They
object, not to the tariff, but only to its protective fea-
tures, and propose, not to abolish it, but only to restrict
it to revenue purposes. Nearly all the opposition to the

69 ~

70 PROTECTION OB FREE TRADE!

protective system in the United States is of this kind,
and in current discussion a tariff for revenue only is
usually assumed to be the sole alternative to a tariff for
protection. But since there are other ways of raising
revenue than by tariffs this manifestly is not so. And if
not useful for protection, the only justification for any
tariff is that it is a good means of raising revenue. Let
us inquire as to this.

Duties on imports are indirect taxes. Therefore the
question whether a tariff is a good means of raising
revenue involves the question whether indirect taxation
is a good means of raising revenue.

As to ease and cheapness of collection indirect taxa-
tion is certainly not a good means of raising revenue.
While there are direct taxes, such as taxes on real estate
and taxes on legacies and successions, from which great
revenues can easily and cheaply be collected, the only
indirect taxes from which any considerable revenue cax>
be obtained require large and expensive staffs of officials
and tlie enforcement of vexatious and injurious regu-
lations. To collect the indirect tax on tobacco and
cigars, France and some other countries make the trade
and manufacture a strict government monopoly, while
Great Britain prohibits the culture of tobacco under
penalty of fine and imprisonment a prohibition particu-
larly injurious to Ireland, where the soil and climate are
in some parts admirably adapted to the growth of cer-
tain kinds of tobacco. In the United States we maintain
a costly inquisitorial system which assumes to trace
every pound of tobacco raised or imported, through all
its stages of manufacture, and requires the most elabo-
rate returns of private business to be made to govern-
ment officials. To collect more easily an indirect tax
upon salt the government of British India cruelly pre-
vents the making of salt in many places where the

TARIFFS FOR REVENUE. 71

natives suffer from the want of it. While indirect taxes
upon spirituous liquors, wherever resorted to, require the
most elaborate system of prohibition, inspection and
espionage.

So with the collection of indirect taxes upon imports.
Land frontiers must be guarded and sea-coasts watched ;
imports must be forbidden except at certain places and
under regulations which are always vexatious and fre-
quently entail wasteful delays and expenses; consuls
must be maintained all over the world, and no end of
oaths required ; vessels must be watched from the time
they enter harbor until the time they leave, and every-
thing landed from them examined, down to the trunks
and satchels and sometimes the persons of passengers,
while spies, informers and "bloodhounds" must be en-
couraged.

But in spite of prohibitions, restrictions, searchings,
watchings and swearings, indirect taxes on commodities
are largely evaded, sometimes by the bribery of officials
and sometimes by the adoption of methods for eluding
their vigilance, which though costly in themselves, cost
less than the taxes. All these costs, however, whether
borne by the government or by the first payers (or
evaders) of the taxes, together with the increased charges
due to increased prices, finally fall on consumers, and
thus this method of taxation is extremely wasteful,
taking from the people much more than the government
obtains.

A still more important objection to indirect taxation
is that when imposed on articles of general use (and it is
only from such articles that large revenues can be had)
it bears with far greater weight on the poor than on the
rich. Since such taxation falls on people not according
to what they have, but according to what they consume,
it is heaviest on those whose consumption is largest in

72 PROTECTION OR FREE TRADE?

proportion to their means. As much sugar is needed to
sweeten a cup of tea for a working-girl as for the richest
lady in the land, but the proportion of their means which
a tax on sugar compels each to contribute to the govern-
ment is in the case of the one much greater than in the
case of the other. So it is with all taxes that increase
the cost of articles of general consumption. They bear
far more heavily on married men than on bachelors ; on
those who have children than on those who have none ;
on those barely able to support their families than on
those whose incomes leave them a large surplus. If the
millionaire chooses to live closely he need pay no more of
these indirect taxes than the mechanic. I have known
at least two millionaires possessed not of one, but of
from six to ten millions each who paid little more of
such taxes than ordinary day-laborers.

Even if cheaper articles were taxed at no higher rates
than the more costly, such taxation would be grossly
unjust; but in indirect taxation there is always a ten-
dency to impose heavier taxes on the cheaper articles
used by all than on the more costly articles used only by
the rich. This arises from the necessities of the case.
Not only do the larger amounts of articles of common
consumption afford a wider basis for large revenues than
the smaller amounts of more costly articles, but taxes
imposed on them cannot be so easily evaded. For
instance, while articles in use by the poor as well as the
rich are under our tariff taxed fifty and a hundred, and
even a hundred and fifty per cent., the tax on diamonds
is only ten per cent., and this comparatively light tax is
most difficult to enforce, owing to the high value of
diamonds as compared with their bulk. Even where dis-
crimination of this kind is not made in the imposition of
indirect taxation, it arises in its collection. Specific
taxes fall more heavily upon the cheaper than the costlier

TARIFFS FOB REVENUE. 73

grades of goods, while even in the case of ad valorem
taxes, undervaluation and evasion are easier in regard to
the more valuable grades.

That indirect taxes thus bear far more heavily on the
poor than on the rich is undoubtedly one of the reasons
why they have so readily been adopted. The rich are
ever the powerful, and under all forms of government
have most influence in forming public opinion and fram-
ing laws, while the poor are ever the voiceless. And
while indirect taxation causes no loss to those who first
pay it, it is collected in such insidious ways from those
who finally pay it that they do not realize it. It thus
affords the best means of getting the largest revenues
from the body of the people with the least remonstrance
against the amount collected or the uses to which it is
put. This is the main reason that has induced govern-
ments to resort so largely to indirect taxation. A direct
tax, where its justice and necessity are not clear, pro-
vokes outcry and opposition which may at times rise to
successful resistance; but not only do those indirectly
taxed seldom realize it, but it is extremely difficult for
them to refuse payment. They are not called on at set
times to pay definite sums to government agents, but the
tax becomes indistinguishably blended with the cost of
the goods they buy. When it reaches those who must
finally pay it, together with all costs and profits of collec-
tion, it is not a tax yet to be paid, but a tax which has
already been paid, some time ago, and many removes
back, and which cannot be separated from other elements
which go to make up the cost of goods. There is no
choice save to pay the tax or go without the goods.

If a tax-gatherer stood at the door of every store, and
levied a tax of twenty-five per cent, on every article
bought, there would quickly be outcry; but the very
people who would fight rather than pay a tax like this

74 PBOTECTION OB FREE TRADE!

will uncomplainingly pay higher taxes when they are
collected by storekeepers in increased prices. And even
if an indirect tax is consciously realized, it cannot easily
be opposed. At the beginning of our Revolution the
indirect tax on tea levied by the British government,
without the consent of the American colonies, was suc-
cessfully resisted by preventing the landing of the tea;
but if the tea had once got into the hands of the dealers,
with the taxes on it paid, the English government could
have laughed at the opposition of the patriots. When in
Ireland, during the height of the Land League agitation,
I was much struck with the ease and certainty with
which an unpopular government can collect indirect
taxes. At the beginning of the century the Irish people,
without any assistance from America, proved in the
famous Tithe war that the whole power of the English
government could not collect direct taxes they had
resolved not to pay; and the strike against rent, which
so long as persisted in proved so effective, could readily
have been made a strike against direct taxation. Had
the government which was enforcing the claim of the
landlords depended on direct taxation, its resources could
thus have been seriously diminished by the same blow
which crippled the landlords; but during all the time
of this strike the force used to put down the popular
movement was being supported by indirect taxation
on the people who were in passive rebellion. The people
who struck against rent could not strike against taxes
paid in buying the commodities they used. Even had
rebellion been active and general, the British govern-
ment could have collected the bulk of its revenues from
indirect taxation, so long as it retained command of the
principal towns.

It is no wonder that princes and ministers anxious to
tnake their revenues as large as possible should prefer a

TABIPPS FOE REVENUE. 75

method that enables them to "pluck the goose without
making it cry/' nor is it wonderful that this preference
should be shared by those who get control of popular
governments; but the reason which renders indirect
taxes so agreeable to those who levy taxes is a sufficient
reason why a people jealous of their liberties should
insist that taxes levied for revenue only should be direct,
not indirect.

It is not merely the ease with which indirect taxes can
be collected that urges to their adoption. Indirect taxes
always enlist active private interests in their favor. The
first rude device for making the collection of taxes easier
to the governing power is to let them out to farm.
Under this system, which existed in France up to the
Revolution, and still exists in such countries as Turkey,
persons called farmers of the revenue buy the privilege
of collecting certain taxes and make their profits, fre-
quently very large, out of the greater amount which
their vigilance and extortion enable them to collect.
The system of indirect taxation is essentially of the same
nature.

The tendency of the restrictions and regulations neces-
sary for the collection of indirect taxes is to concentrate
business and give large capital an advantage. For
instance, with a board, a knife, a kettle of paste and a
few dollars' worth of tobacco, a competent cigar-maker
could set up in business for himself, were it not for the
revenue regulations. As it is, in the United States, the
stock of tobacco which he must procure is not only
increased in value some two or three times by a tax
upon it ; but before the cigar-maker can go to work he
must buy a manufacturer's license and find bonds in
the sum of five hundred dollars. Before he can sell the
cigars he has made, he must furthermore pay a tax on
them, and even then if he would sell cigars in less quanti-

76 PROTECTION OB PEEE TRADE!

ties than by the box he must buy a second license. The
effect of all this is to give capital a great advantage, and
to concentrate in the hands of large manufacturers a
business in which, if free, workmen could easily set up
for themselves.

But even in the absence of such regulations indirect
taxation tends to concentration. Indirect taxes add to the
price of goods not only the tax itself but also the profit
upon the tax. If on goods costing a dollar a manufac-
turer or merchant has paid fifty cents in taxation, he will
now expect profit on a dollar and fifty cents instead of
upon a dollar. As, in the course of trade, these taxed
goods pass from hand to hand, the amount which each
successive purchaser pays on account of the tax is con-
stantly augmenting. It is not merely inevitable that
consumers have to pay considerably more than a dollar
for every dollar the government receives, but larger
capital is required by dealers. The need of larger capital
for dealing in goods that have been enhanced in cost by
taxation, the restrictions imposed on trade to secure the
collection of the tax, and the better opportunities which
those who do business on a large scale have of managing
the payment or evading the tax, tend to concentrate
business, and, by checking competition, to permit large
profits, which must ultimately be paid by consumers.
Thus the first payers of indirect taxes are generally
not merely indifferent to the tax, but regard it with
favor.

That indirect taxation is of the nature of farming the
revenue to private parties is shown by the fact that those
who pay such taxes to the government seldom or never
ask for their reduction or repeal, but on the contrary
generally oppose such propositions. The manufacturers
and dealers in tobacco and cigars have never striven to
secure any reduction in the heavy taxes on those articles,

TARIFFS FOB REVENUE. 77

and the importers who pay directly the immense sums
collected by our custom-houses have never grumbled at
the duties, however they may grumble at the manner of
their collection. When, at the time of the war, the
national taxation was enormously increased there was no
opposition to the imposition of indirect taxation from
those who would thus be called upon to pay large sums
to the government. On the contrary, the imposition of
these taxes, by enhancing the value of stock in hand,
made many fortunes. And since the war the main diffi-
culty in reducing taxation has been the opposition of the
very men who pay these taxes to the government. The
reduction of the war tax on whisky was strongly
opposed by the whisky ring, composed of great dis-
tillers. The match-manufacturers fought bitterly the
abolition of the tax on matches. Whenever it has been
proposed to reduce or repeal any indirect tax Congress
has been beset by a persistent lobby urging that, what-
ever other taxes might be dispensed with, that particular
tax might be left in full force. In order to provide an
excuse for keeping up indirect taxes all sorts of extrava-
gant expenditures of the national money have been made,
and hundreds of millions have been voted away to get
them out of the Treasury.* Despite all this extrava-
gance, we have a surplus ; yet we go on collecting taxes
we do not need because of the opposition of interested
parties to their reduction. This opposition is of the
same kind and springs from the same motives as that
which the farmers of the revenue under the old French
system would have made to the abolition of a tax which
enabled them to extort two millions of francs from the

* Just now (1886) the interests concerned in keeping up indirect
taxation are urging a worse than useless scheme for spending enor-
mous sums on iron-clad coast defenses.

78 PROTECTION OB FREE TRADE!

French people for one million which they paid to the
government.

Now, over and above the great loss to the people which
indirect taxation thus imposes, the manner in which it
gives individuals and corporations a direct and selfish
interest in public affairs tends powerfully to the corrup-
tion of government. These moneyed interests enter into
our politics as a potent demoralizing force. What to the
ordinary citizen is a question of public policy, affecting
him only as one of some sixty millions of people, is to
them a question of special pecuniary interest. To this is
largely due the state of things in which politics has
become the trade of professional politicians ; in which it
is seldom that one who has not money to spend can, with
any prospect of success, present himself for the suffrages
of his fellow-citizens ; in which Congress is surrounded
by lobbyists, clamorous for special interests, and ques-
tions of the utmost general importance are lost sight of
in the struggle which goes on for the spoils of taxation.
That under such a system of taxation our government is
not far more corrupt than it is, is the strongest proof of
the essential goodness of republican institutions.

That indirect taxes may sometimes serve purposes
other than the raising of revenue I do not deny. The
license taxes exacted from the sellers of liquor may be
defended on the ground that they diminish the number
of saloons and lessen a traffic injurious to public morals.
And so taxes on tobacco and spirits may be defended on
the ground that the smoking of tobacco and the drinking
of spirits are injurious vices, which may be lessened by
making tobacco and spirits more expensive, so that
(except the rich) those who smoke may be compelled to
smoke poorer tobacco, and those who drink to drink
viler liquor. But merely as a means of raising revenue,
it is clear that indirect taxes are to be condemned, since

TARIFFS FOB REVENUE. 79

they cost far more than they yield, bear with the greatest
weight upon those least able to pay, add to corruptive
influences, and lessen the control of the people over their
government.

All the objections which apply to indirect taxes in
general apply to import duties. Those protectionists are
right who declare that protection is the only justification
for a tariff,* and the advocates of " a tariff for revenue
only n have no case. If we do not need a tariff for pro-
tection we need no tariff at all, and for the purpose of
raising revenue should resort to some system which will
not tax the mechanic as heavily as the millionaire, and
will not call on the man who rears a family to pay on
that account more than the man who shirks his natural
obligation, and leaves some woman whom in the scheme
of nature it was intended that he should support, to take
care of herself as best she can.

* "Tariffs for revenue should have no existence. Interferences
with trade are to be tolerated only as measures of self-protection. 19
H. C. CAREY, Past, Present and Future, p. 472.

" Taxes for the sake of revenue should be imposed directly, because
such is the only mode in which the contribution of each individual
can be adjusted in proportion to his means." PROFESSOR E. P.
SMITH, Political Economy, pp. 265-268.

"Duties for revenue . . . are highly unjust. They inflict all
the hardship of indirect and unequal taxation without even the
purpose of benefiting the consumer." -PROFESSOR R. E. THOMPSON,
Political Economy, p. 232.

CHAPTER IX.

TARIFFS FOE PROTECTION.

TyROTECTIVE tariffs differ from revenue tariffs in
1 their object, which is not so much that of obtaining
revenue as that of protecting home producers from the
competition of imported commodities.

The two objects, revenue and protection, are not
merely distinct, but antagonistic. The same duty may
raise some revenue and give some protection, but, past a
certain point at least, in proportion as one object is
secured the other is sacrificed, since revenue depends on
the bringing in of commodities ; protection on keeping
them out. So the same tariff may embrace both protec-
tive and revenue duties, but while the protective duties
lessen its power of collecting revenue, the revenue duties
by adding to the cost of home production lessen its
power of encouraging home producers. The duties of a
purely revenue tariff should fall only on commodities not
produced in the country; or, if levied on commodities
partly produced at home, should be balanced by equiva-
lent internal taxes to prevent incidental protection. In
a purely protective tariff, on the other hand, commodities
not produced in the country should be free and duties
should be levied on commodities that are or may be pro-
duced in the country. And, just in proportion as it
accomplishes its object, the less revenue will it yield.
The tariff of Great Britain is an example of a purely

80

TARIFFS FOB PROTECTION. 81

revenue tariff, incidental protection being prevented by
excise duties. There is no example of a purely protective
tariff, the purpose of obtaining revenue seeming always to
be the original stock upon which protective features are
grafted. The tariff of the United States, like all actual
protective tariffs, is partly revenue and partly protective,
its original purpose of yielding revenue having been sub-
ordinated to that of giving protection, until it may now
be best described as a protective tariff yielding incidental
revenue.

As we have already considered the revenue functions
of tariffs, let us now consider their protective functions.

Protection, as the word has come to be used to denote
a scheme of national policy, signifies the levying of
duties on the importation of commodities (as a means) in
order (as an end) to encourage domestic industry.

Now, when the means proposed in any such scheme is
the only means by which the proposed end can be
reached, it is only needful to inquire as to the desira-
bility of the end ; but when the proposed means is only
one of various means we must satisfy ourselves that it is
the best. If it is not, the scheme is condemned irrespec-
tive of the goodness of its end. Thus the advisability of
protection does not, as is generally assumed, follow the
admission of the advisability of encouraging domestic
industry. That granted, the advisability of protection is
still an open question, since it is clear that there are
other ways of encouraging home industry than by
import duties.

Instead of levying import duties, we might, for
instance, destroy a certain proportion of imported com-
modities, or require the ships bringing them to sail so
many times round the world before landing at our ports.
In either of these ways precisely the same protective
effect could be secured as by import duties, and in cases

82 PEOTECTION OE PEEE TEADET

where duties secure full protection by preventing impor.
tation, such methods would involve no more waste. Or,
instead of indirectly encouraging domestic producers by
levying duties on foreign goods, we might directly
encourage them by paying them bounties.

As a means of encouraging domestic industry the
bounty has over the protective system all the advantages
that the system of paying public officers fixed salaries
has over the system prevailing in some countries, and in
some instances in our own, of letting them make what
they can. As by paying fixed salaries we can get offi-
cials at such places and to perform such functions as we
wish, while under the make-what-you-can system they
can only be got at places and in capacities that will
enable them to pay themselves, so do bounties permit
the encouragement of any industry, while protection
permits only the encouragement of the comparatively
few industries with which imported commodities com-
pete. As salaries enable us to know what we are
paying, to proportion the rewards of different offices to
their respective dignity, responsibility and arduousness,
while make-what-you-can may give to one official much
more than is necessary, and to others not enough, so do
bounties enable us to see and to fix the encouragement
to each industry, while the protective system leaves the
public in the dark and makes the encouragement to each
industry almost a matter of chance. And as salaries
impose on the people much lighter and more fairly
apportioned burdens than does the make-what-you-can
system, so is the difference between bounties and pro-
tection.

To illustrate the working of the two systems, let it be
assumed desirable to encourage aerial navigation at
public expense. Under the bounty system we should
offer premiums for the building and successful operation

TARIFFS FOB PROTECTION. 83

of air-ships. Under the protective system we should
impose deterrent taxes on all existing methods of trans-
portation. In the one case we should have nothing to
pay till we got what we wanted, and would then pay a
definite sum which would fall on individuals and localities
in general taxes. But in the other case we should have to
suffer all the inconveniences of obstructed transportation
before we got air-ships, and whether we got them or not ;
and while these obstructions would, in some cases, more
seriously affect individuals, businesses and localities than
in others, we should never be able to tell how much they
distorted industry and cost the people, or how much they
stimulated the invention and building of air-ships. In
the one case, moreover, after aerial navigation had
proved successful, and the stipulated bounties had been
paid, the air-ship men would hardly have the audacity to
ask for more bounties, and would not be likely to get
them if they did. In the other case, the public would
have grown accustomed to the taxes on surface transpor-
tation, while the air-ship proprietors, if they had not
convinced themselves that these taxes were necessary to
the continued prosperity of aerial navigation, could
readily pretend so, and would have, in opposing their
repeal, the advantage of that inertia which tends to the
continuance of anything that is.

The superiority of the bounty system over the protec-
tive system for the encouragement of any single industry
is very great ; but it becomes greater as the number of
industries to be encouraged is increased. When we
encourage an industry by a bounty we do not discourage
any other industry, except as the necessary increase in
general taxation may have a discouraging effect. But
when to encourage one industry we raise the price of its
products by a protective duty, we at the same time pro-
duce a directly injurious effect upon other industries that

84 PROTECTION OE TREE TRADE?

use those products. So complicated has production
become, so intimate are the relations between industries,
and in so many forms do the products of one industry
enter into the materials or processes of others, that what
will be the effect of a single protective duty it is hard for
an expert to say. But when it comes to encouraging not
one nor a dozen, but a thousand different industries, it
is impossible for human intelligence to trace the multi-
farious effects of raising the prices of so many products.
The people cannot tell what such a system costs them,
nor in most cases can even those who are supposed to be
its beneficiaries really tell how their gains under it com-
pare with their losses from it.

The "drawback" system is an attempt to prevent, so
far as exports are concerned, the discouragement to
which the protection of one industry subjects others.
Drawbacks are bounties paid on exports of domestic
goods to an amount which it is calculated will compen-
sate for the addition a duty on material has made to
their cost. But drawbacks not only leave home prices
undiminished, but while fruitful of fraud, can only in
small part prevent the discouragement of exports, since
it is only on goods into which dutiable commodities have
entered in large proportion and obvious ways that draw,
backs are allowed, or that it is worth the while of the
exporter to attempt to collect them. In 1884, for
instance, the United States paid out a larger sum in
drawbacks on copper than was received in duties on
copper, yet it is certain that very many exports into
which copper entered, and which were therefore
enhanced in cost by the duty, got no drawback what-
ever. And so of drawbacks on refined sugar, for which
we are paying a sum greatly in excess of the duties col-
lected on the raw sugar, though many of our exports^
such as those of condensed milk, syrups and preserved
fruits, are much curtailed by these duties

TARIFFS FOB PROTECTION. 86

The substitution of bounties for protection in encour-
aging industry would do away with the necessity for
such inefficient, fraud-provoking and back-action devices.
Under the bounty system prices would not be raised,
except as affected by general taxation. Each encouraged
producer would know in dollars and cents how much
encouragement he got, and the people at large would
know how much they paid. In short, all and even more
than protection can do to encourage home industries can
be done more cheaply and more certainly by bounties.

It is sometimes asserted, as one of the advantages of
tariff duties, that they fall on the producers of imported
goods, and are thus paid by foreigners. This assertion
contains a scintilla of truth. An import duty on a com-
modity of which the production is a closely controlled
foreign monopoly may in some cases fall in part or in
whole upon the foreign producer. For instance, let us
say that a foreign house or combination has a monopoly
in the production of a certain article. Within the limits
of cost on the one hand and the highest rate at which
any can be sold on the other, the price of such article
can be fixed by the producers, who will naturally fix it at
the point they conclude will give the largest aggregate
profits. If we impose an import duty on such an article
they may prefer to reduce their profit on what they sell
to this country rather than have the sale diminished by
the addition of the duty to the price. In such case the
duty will fall upon them.

Or, again, let us suppose a Canadian farmer so situated
that the only market in which he can conveniently sell
his wheat is on the American side. Wheat being a
commodity of which our home production not merely
supplies home demands, but leaves a surplus for export,
the duty on wheat does not add to price, and the Cana-
dian farmer so exceptionally situated that he must send
wheat to this side, although there is no general demand

86 PROTECTION OB FREE TRADE!

for Canadian wheat, cannot get back in enhanced price
the duty he must pay.

The two classes represented by these instances suggest
all the cases in which import duties fall on foreign pro-
ducers.* Such cases, too unimportant to be considered
in any estimates of national revenue, are only the rare
exceptions to the general rule that the ability to tax ends
with the territorial limits of the taxing power. And it is
well for mankind that this is so. If it were possible for
the government of one country, by any system of taxa-

* In certain cases where an import duty, levied in one country
on the produce of another, has the effect of reducing price in the
exporting country at the expense of rent, it may, in some part, fall
upon foreign landowners. John Stuart Mill ("Political Economy,"
Book V., Chapter III.,) further maintains that taxes on imports fall
in part, not on the foreign producer of whom we buy, but on the
foreign consumer to whom we sell since they increase the cost of
products we export. But this is only to say that the injury which
we do ourselves by protection must in some part fall upon those with
whom we trade. And even if import duties do, in such ways, some-
what increase the cost to foreigners of what they get from us, and
thus, in some degree, compel them to share our loss, yet they also
handicap us when we come into competition with them. Thus,
assuming that our tariff upon imports may at times, to some slight
extent, have increased the price which English consumers have had
to pay for our cotton, wheat or oil, the increased cost of production
in the United States has certainly operated far more strongly to give
English producers an advantage over American producers in markets
in which they compete, and to enable England to take the lion's
share of the ocean-borne commerce of the world.

The minute tracing of the actions and reactions of taxation upon
international trade is, however, more a matter of theoretical nicety
than of practical interest, since the genera? conclusion will be that
stated in the text, that while we cannot injure ourselves without
injuring others, the taxing power of a government is substantially
restricted to its territorial limit. The clearest exception to this is
in the case of export duties on articles of which the country levying
the export duty has a monopoly, as Brazil has of india-rubber and
Cuba of the Havana tobacco.

TARIFFS FOB PROTECTION. 87

tion, to compel the people of other countries to pay its
expenses, the world would soon be taxed into barbarism.

But the possibility of exceptional cases in which import
duties may in part or in whole fall on foreign producers,
instead of domestic consumers, has m it, even for those
who would gladly tax "foreigners," no shadow of a
recommendation for protection. For it will be noticed
that the cases in which an import duty falls on foreign
producers, are cases in which it can afford no encourage-
ment to home producers. An import duty can only fall
on foreign producers when its payment does not add to
price ; while the only possible way in which an import
duty can encourage home producers is by adding to price.

It is sometimes said that protection does not increase
prices. It is sufficient answer to ask, how then can it
encourage? To say that a protective duty encourages
the home producer without raising prices, is to say that
it encourages him without doing anything for him.
Wherever beneath this assertion, as regardless of fact as
it is of theory, there is any glimmering of reason, it is
either in the notion that protective duties do not per-
manently add to prices, because they bring about such a
competition between home producers as finally carries prices
down to the previous level ; or else in a confused idea that
it would be an advantage to home producers to be secured
the whole home market, even if at no higher prices.

But as to the first, the only way in which a protective
duty can increase home competition in the production of
any commodity is by so increasing prices as to attract
producers to the industry by the superior profits to be
obtained. This competition, when free to operate, ulti-
mately reduces profits to the general level.* But this is

* The effect of protection upon profits in the protected Industries
will be more fully examined in Chapter XVII.

88 PROTECTION OR FREE TRADE!

not to say that it reduces prices to what they would be
without the duty. The profits of Louisiana sugar-grow-
ing are now, doubtless, no larger than in other occupa-
tions involving equal risks, but the duty on sugar does
make the price of sugar very much higher in the United
States than it is in England, where there is no duty upon
it. And even where there is no reason In natural or
social conditions why a commodity should not be pro-
duced as cheaply as in any foreign country, the effect of
the network of duties, of which the particular duty is
but a part, is to increase the cost of production, and thus,
though profits may fall, to keep prices above the point of
free importation. Did the price of a protected article
fall to the point at which the foreign product could not
be Imported were there no duty, the duty would cease to
protect, since the foreign product would not be imported
if it were abolished, and the producers for whose protec-
tion it was imposed would cease to care for Its retention.
In what instance has this been the case? Are any of
our protected industries less clamorous for protection
now than they were forty years ago?

As to the second notion, it is to be observed that the
only way in which a protective duty can give the home
market to home producers is by increasing the price at
which foreign products can be sold in it. Not merely
does this increase in the price of foreign products compel
an increase in the price of domestic products into which
they enter, but the shutting out of foreign products must
Uncrease the price of similar domestic products. For it
!is only where prices are fixed by the will of the producer
that increase or decrease in supply does not result in
I increase or decrease of price. Thus, while the newspaper
I business is not a monopoly, the publication of each indi-
! vidual paper is, and its price is fixed by the publisher. A
| publisher may, and in most cases will, prefer increased cir-

TARIFFS FOB PROTECTION. 89

culation to increased prices. And if competition were to
be lessened, or even cut off, as, for instance, by imposing
a stamp duty on, or prohibiting the publication of all the
newspapers of New York save one, it would not neces-
sarily follow that the price of that paper would be
increased. But the prices of the great mass of com- !
modities, and especially the great mass of commodities
which are exported and imported, are regulated by com-
petition. They are not fixed by the will of producers,
but by the relative intensity of supply and demand,
which are brought to an equation in price by what Adam
Smith called "the higgling of the market," and hence
any lessening of supply caused by the shutting out of
importations will at once increase prices.

In short, the protective system is simply a system of
encouraging certain industries by enabling those carry-
ing them on to obtain higher prices for the goods they
produce. It is a clumsy and extravagant mode of giving
encouragement that could be given much better and at
much less cost by bounties or subsidies. If it be wise to
" encourage " American industries, and this we have yet
to examine, the best way of doing so would be to abolish
our tariff entirely and to pay bounties from funds
obtained by direct taxation. In this way the cost could
be distributed with some approach to fairness, and the
citizen who is worth a million times more than another
could have the satisfaction of contributing a million
times as much to the encouragement of American
industry.

I do not forget that, from the bounties given in the
colonial days for the killing of noxious animals to the
subsidies granted to the Pacific railroads, experience has
shown that the bounty system inevitably leads to fraud
and begets corruption, while but poorly accomplishing the
ends sought by it. But these evils are inseparable from

00 PROTECTION OR FREE TRADE?

any method of " encouragement/' and attach to the pro
tective more than to the bounty system, because its
operations are not so clear. If protection has been pre-
ferred to bounties it is not that it is a better means of
encouragement, but for the same reason that indirect
has been preferred to direct taxation because the people
do not so readily realize what is being done. Where a
grant of a hundred thousand dollars directly from the
treasury would raise an outcry, the imposition of a duty
which will enable the appropriation of millions in higher
prices excites no comment. Where bounties have been
given by our States for the establishment of new indus-
tries they have been comparatively small sums, given in
a single payment or in a subsidy for a definite term of
years. Although the people have in some cases been
willing thus to pay bounties to a small extent and for a
short time, in no case have they consented to regard
them as a settled thing, and to keep on paying them year
after year. But protective duties once imposed, the
protected industry has always been as clamorous for the
continuance of protection as it was in the beginning for
the grant of it. And the people not being so conscious
of the payment have permitted it to go on.

It is often said by protectionists that free trade is
right in theory but wrong in practice. Whatever may
be meant by such phrases they involve a contradiction
in terms, since a theory that will not agree with facts
must be false. But without inquiring into the validity
of the protective theory it is clear that no such tariff as
it proposes ever has been or ever can be made.

The theory of free trade may be carried into practice
to the point of ideal perfection. For to secure free trade
we have only to abolish restrictions. But to carry the
theory of protection into practice some articles must be
taxed and others left untaxed, and, as to the articles

TARIFFS FOE PROTECTION. 91

taxed, different rates of duty must be imposed. And as
the protection given to any industry may be neutralized
by protection that enhances the price of its materials,
careful discrimination is required, for there are very few
articles that can be deemed finished products in relation
to all their uses. The finished products of some indus-
tries are the materials or tools of other industries. Thus,
while the protection of any industry is useless unless
sufficient to produce the desired effect, too much protec-
tion is likely, even from a protective standpoint, to do
harm.

It is not merely that the ideal perfection with which
the free-trade theory may be reduced to practice is
impossible in the case of protection, but that even a
rough approximation to the protective theory is impos-
sible. There never has been a protective tariff that satis-
fied protectionists, and there never can be. Our present
tariff, for instance, is admitted by protectionists to be
full of the grossest blunders.* It was adopted only

* For instance, to cite only one case, the last Tariff Act, which
went into effect in July, 1883, raised the duty on the fabric used in
the manufacture of niching and rufflings from 35 to 125 per cent.,
while leaving the duty of the finished article at 35 per cent. Pre-
vious to this, say the manufacturers of these goods, in a memorial
address to the Secretary of the Treasury, they not only supplied the
American market, but sold hundreds of thousands of dollars' worth
every year to Canada, the West Indies and other countries, the
labor-saving machinery which they had in use giving them an advan-
tage which, in spite of the 35-per-cent. tax on their material, enabled
them to compete successfully with European factories. But the
125-per-cent. duty has not only cut off this export trade completely,
but has led to such an importation of British goods that, as the
memorial declares, thousands of hands have lost their- employment,
and three-fourths of the manufacturers engaged in the business have
been utterly ruined. This, of course, was not intended by Congress.
The ruffling industry is only one of the many minor industries that
were thrown down and trampled upon in the last tariff scramble.

92 PROTECTION OB FREE TRADE f

because, after a long wrangle, it was found impossible to
agree upon a better one, and it is maintained and de-
fended only because any attempt to amend it would begin
a scramble out of which no one can tell what sort of a
tariff would come. This has been the case with every
former tariff, and must be the case with every future tariff.

To make a protective tariff that would even roughly
accord with the protective theory would require in the
first place a minute knowledge of all trade and industry,
and of the manner in which an effect produced on one
industry would act and react on others. This no king,
congress or parliament ever can have. But, further
than this, absolute disinterestedness is required, for the
fixing of protective duties is simply the distribution of
pecuniary favors among a crowd of greedy applicants.
And even were it possible to obtain for the making of a
protective tariff a body of men themselves disinterested
and incapable of yielding to bribery, to threats, to friend-
ship or to flattery, they would have to be more than
human not to be dazed by the clamor and misled by the
representations of selfish interests.

The making of a tariff, instead of being, as the protec-
tive theory requires, a careful consideration of the cir-
cumstances and needs of each industry, is in practice
simply a great "grab" in which the retained advocates
of selfish interests bully and beg, bribe and logroll, in
the endeavor to get the largest possible protection for
themselves without regard for other interests or for the
general good. The result is, and always must be, the
enactment of a tariff which resembles the theoretical
protectionist's idea of what a protective tariff should be
about as closely as a bucketful of paint thrown against
a wall resembles the fresco of a Raphael.

But this is not all. After a tariff has been enacted,
come the interpretations and decisions of treasury offi-

TABIFFS FOB PROTECTION. 93

cials and courts to unmake and remake it,* and duties
are raised or lowered by a printer's placing of a comma
or by arbitrary constructions, frequently open to grave
suspicion, and which no one can foresee, so that, as
Horace Qreeley naively says ("Political Economy," p.
183):

The longer a tariff continues the more weak spots are found, the
more holes are picked in it, until at last, through the influence of
successive evasions, constructions, decisions, its very father could
not discern its original features in the transformed bantling that
has quietly taken its place.

Under the bounty system, bad as it is, we can come
much nearer to doing what we want to, and to knowing
what we have done.

* The Secretary of the Treasury states that there are now (Feb-
ruary, 1886) over 2300 tariff cases pending in the Southern District
of New York alone.

CHAPTER X.

THE ENCOURAGEMENT OP INDUSTRY.

WITHOUT questioning the end sought by them we
have seen that protective tariffs are to be con-
demned as a means. Let us now consider their end
the encouragement of home industry.

There can be no difference of opinion as to what
encouragement means. To encourage an industry in the
protective sense is to secure to those carrying it on
larger profits than they could of themselves obtain.
Only so far and so long as it does this can any protection
encourage an industry.

But when we ask what the industries are that protec-
tion proposes to encourage we find a wide difference.
Those whom American protectionists have regarded as
their ablest advocates have asked protection for the
encouragement of "infant industries" describing the
protective system as a means for establishing new indus-
tries in countries to which they are adapted.* They

* "Whoever will consult Alexander Hamilton's Report on Manu-
factures, the writings of Matthew Carey, Hezekiah Niles and their
compeers, with the speeches of Henry Clay, Thomas Newton, James
Tod, Walter Forward, Bollin G. Mallary, and otjier forensic cham-
pions of protection, with the messages of our earlier Presidents, of
Governors Simon Snyder, George Clinton, Daniel D. Tompkins, De
Witt Clinton, etc., cannot fail to note that they champion not the
maintenance, but the creation of home manufactures." HoRACB
GREELEY, Political Economy, p. 34

THE ENCOURAGEMENT OP INDUSTRY. 95

have scouted the idea of attempting to encourage all
industry, and declared the encouragement of industries
not adapted to a country, or already established, or for a
time longer than necessary for their establishment, to
be waste and robbery. As it is now popularly advocated
and practically applied in the United States the aim of
protection, however, is not the encouragement of " infant
industries" but the encouragement of "home industry "
that is to say, of all home industries. And what has
proved true in our case is generally true. Wherever
protection is once begun, the imposition of duties never
stops until every home industry of any political strength
that can be protected by tariff gets some encouragement.
It is only in new countries and in the beginnings of the
system that the encouragement of infant industries can
be presented as the sole end of protection. European
protectionists can hardly ask protection, on the ground
of their infancy, for industries that have been carried on
since the time of the Romans. And in the United States
to ask now the encouragement of such giants as our iron,
steel and textile industries as a means for their establish-
ment would, after all these years of high tariffs, be mani-
festly absurd.

We have thus two distinct propositions to examine
the proposition that new and desirable industries should
be encouraged, which still figures in the apologetics of
protection, and the proposition popularly urged and
which our protectionist legislation attempts to carry into
effect that home industry should be encouraged.

As an abstract proposition it is not, I think, to be
denied that there may be industries to which temporary
encouragement might profitably be extended. Industries
capable, in their development, of much public, benefit
have often to struggle under great disadvantages in their
beginnings, and their development might sometimes be

96 PROTECTION OB FREE TRADET

beneficially hastened by judicious encouragement. But
there are insuperable difficulties in the way of discover-
ing what industries would repay encouragement. There
are, doubtless, in every considerable community some
men of exceptional powers who, if provided at public
expense with an assured living and left free to investi-
gate, to invent or to think, would make to the public
most valuable returns. But it is certain that, under any
system yet devised, such livings, if instituted, would not
be filled by men of this kind ; but by the pushing and
influential, by flatterers and dependents of those in
power or by respectable nonentities. The very men who
would give a good return in such places would, by virtue
of their qualities, be the last to get them.

So it is with the encouragement of struggling indus-
tries. All experience shows that the policy of encourage-
ment, once begun, leads to a scramble in which it is the
strong, not the weak ; the unscrupulous, not the deserv-
ing, that succeed. What are really infant industries
have no more chance in the struggle for governmental
encouragement than infant pigs have with full-grown
swine about a meal-tub. Not merely is the encourage-
ment likely to go to industries that do not need it, but it
is likely to go to industries that can be maintained only
in this way, and thus to cause absolute loss to the com-
munity by diverting labor and capital from remunerative
industries. On the whole, the ability of any industry to
establish and sustain itself in a free field is the measure
of its public utility, and that "struggle for existence"
which drives out unprofitable industries is the best means
of determining what industries are needed under existing
conditions and what are not. Even promising industries
are more apt to be demoralized and stunted than to be
aided in healthy growth by encouragement that gives
them what they do not earn, just as a young man is

THE ENCOURAGEMENT OP INDUSTRY. 07

nore likely to be injured than benefited by being left a
fortune. The very difficulties with which new industries
must contend not merely serve to determine which are
really needed, but also serve to adapt them to surround-
ing conditions and to develop improvements and inven-
tions that under more prosperous circumstances would
never be sought for.

Thus, while it may be abstractly true that there are
industries that it would be wise to encourage, the only
safe course is to give to all " a fair field and no favor."
Where there is a conscious need for the making of some
invention or for the establishment of some industry
which, though of public utility, would not be commer-
cially profitable, the best way to encourage it is to offer
a bounty conditional upon success.

Nothing could better show the futility of attempting
to make industries self-supporting by tariff than the
confessed inability of the industries that we have so long
encouraged to stand alone. In the early days of the
American Republic, when the friends of protection were
trying to ingraft it upon the Federal revenue system,
protection was asked, not for the maintenance of Ameri-
can industry, but for the establishment of " infant indus-
tries," which, it was asserted, would, if encouraged for a
few years, be able to take care of themselves. The
infant boys and girls of that time have grown to matu-
rity, become old men and women, and with rare excep-
tions have passed away. The nation then fringing the
Atlantic seaboard has extended across the continent, and
instead of four million now numbers nearly sixty million
people. But the "infant industries," for which a little
temporary protection was then timidly asked, are still
infants in their desire for encouragement. Though they
have grown mightily they claim the benefits of the
"Baby Act" all the more lustily, declaring that if they

98 PROTECTION OR FREE TRADE?

cannot have far higher protection than at the beginning
they dreamed of asking they must perish outright.

When United States Senator Broderick, shot by Chief-
Justice Terry in a duel, died without making a will, a
Dublin man wrote to the editor of a San Francisco news-
paper claiming to be next of kin* He gave the date of
his birth, which showed him forty-seven years of age,
and wound up by adjuring the editor to help a poor
orphan, who had lost both father and mother. The
"infant industry" argument nowadays always reminds
me of that orphan.

Protectionist writers have not yet given up the "infant
industry" plea, for it is the only ground on which with
any semblance of reason protection can be asked; but in
the face of the facts they have extended the time In
which it is averred that protection can establish an
infant industry. The American people used to be told
that moderate duties for a few years would enable the
protected industries to stand alone and defy foreign
competition. But in the latest edition of his "Political
Economy" (p. 233), Professor Thompson of the University
of Pennsylvania tells us that "it will ordinarily take the
lifetime of two generations to acclimatize thoroughly a
new manufacture, and to bring the native production up
to the native demand."

When we are told that two generations should tax
themselves to establish an industry for the third, well
may we ask, "What has posterity ever done for us?"
Yet even this promise is not borne out by facts. Indus-
tries that we have been protecting for more than two
generations now need, according to protectionists, more
protection than ever.

The popular plea for protection in the United States
to-day is not, however, the encouragement of infant
industries, but the encouragement of home industry, that
is, all home industry.

THE ENCOURAGEMENT OF INDUSTRY. 90

Now it is manifestly impossible for a protective tariff
to encourage all home industry. Duties upon commod-
ities entirely produced at home can, of course, have no
effect in encouraging any home industry. It is only
when imposed upon commodities partly imported and
partly produced at home, or entirely imported, yet
capable of being produced at home, that duties can in
any way encourage an industry. No tariff which the
United States imposed could, for instance, encourage the
growth of grain or cotton, the raising of cattle, the pro-
duction of coal-oil or the mining of gold or silver j for
instead of importing these things we not only supply
ourselves, but have a surplus which we export. Nor
could any import duty encourage any of the many indus-
tries which must be carried on where needed, such as
building, horseshoeing, the printing of newspapers, and
so on. Since these industries that cannot be protected
constitute by far the larger part of the industries of
every country, the utmost that by a protective tariff can
be attempted is the encouragement of only a few of the
total industries of a country.

Yet in spite of this obvious fact, protection is never
urged for the encouragement of the industries that alone
can profit by a tariff. That would be to admit that to
some it gave special advantages over others, and so in
the popular pleas that are made for it protection is urged
for the encouragement of all industry. If we ask how
this can be, we are told that the tariff encourages the
protected industries, and then the protected industries
encourage the unprotected industries; that protection
builds up the factory and iron-furnace, and the factory
and iron-furnace create a demand for the farmer's pro-
ductions.

Imagine a village of say a hundred voters. Imagine
two of these villagers to make such a proposition as this :
"We are desirous, fellow-citizens, of seeing you more

100 PROTECTION OB FREE TRADE!

prosperous and to that end propose this plan : Give ua
the privilege of collecting a tax of five cents a day from
every one in the village. No one will feel the tax much,
for even to a man with a wife and eight children it will
come only to the paltry sum of fifty cents a day. Yet
this slight tax will give our village two rich citizens who
can afford to spend money. We will at once begin to
live in commensurate style. We will enlarge our houses
and improve our grounds, set up carriages, hire servants,
give parties and buy much more freely at the stores.
This will make trade brisk and cause a greater demand
for labor. This, in turn, will create a greater demand
for agricultural productions, which will enable the neigh-
boring farmers to make a greater demand for store
goods and the labor of mechanics. Thus shall we all
become prosperous."

There is in no country under the sun a village in
which the people would listen to such a proposition.
Yet it is every whit as plausible as the doctrine that
encouraging some industries encourages all industries.

The only way in which we could even attempt to
encourage all industry would be by the bounty or sub-
sidy system. Were we to substitute bounties for duties
as a means of encouraging industry it would not only
become possible for us to encourage other industries
than those now encouraged by tariff, but we should be
forced to do so, for it is not in human nature that the
farmers, the stock-raisers, the builders, the newspaper
publishers and so on, would consent to the payment of
bounties to other industries without demanding them
for their own. Nor could we consistently stop until
every species of industry, to that of the boot-black or rag-
picker, was subsidized. Yet evidently the result of such
encouragement of each would be the discouragement of
all For as there could be distributed only what was

THE ENCOURAGEMENT OP INDUSTRY. 101

raised by taxation, less the cost of collection, no one
could get back in subsidies, were there any fairness in
their distribution, as much as he would be called upon to
pay in taxes.

This practical reduction to absurdity is not possible
under the protective system, because only a small part of
the industries of a country can thus be "encouraged,"
while the cost of the encouragement is concealed in
prices and is not realized by the masses. The tax-
gatherer does not demand from each citizen a contribution
to the encouragement of the favored few. He sits down
in a custom-house and by taxing imports enables the
favored producer to collect "encouragement" from his
fellow-citizens in higher prices. Yet it is as true of
encouragement by tariff as of encouragement by bounty
that the gain to some involves loss to others, and since
encouragement by tariff involves far more cost and
waste than encouragement by bounty, the proportion
which the loss bears to the gain must be greater. How-
ever protection may affect special forms of industry it
must necessarily diminish the total return to industry-
first, by the waste inseparable from encouragement by
tariff, and, second, by the loss due to the transfer of
capital and labor from occupations which they would
choose for themselves to less profitable occupations
which they must be bribed to engage in. If we do not
see this without reflection, it is because our attention is
engaged with but a part of the effects of protection. We
see the large smelting- works and the massive mill with-
out realizing that the same taxes which we are told have
built them up have made more costly every nail driven
and every needleful of thread used throughout the whole
country. Our imaginations are affected as were those
of the first Europeans who visited India, and who,
impressed by the profusion and magnificence of the

102 PROTECTION OR FREE TRADE!

Rajahs, but not noticing the abject poverty of the
masses, mistook for the richest country in the world
what is really the poorest.

But reflection will show that the claim popularly made
for protection, that it encourages home industry (i.e., all
home industry), can be true only in one sense the sense
in which Pharaoh encouraged Hebrew industry when he
compelled the making of bricks without straw. Protec-
tive tariffs make more work, in the sense in which the
spilling of grease over her kitchen floor makes more
work for the housewife, or as a rain that wets his hay
makes more work for the farmer.

CHAPTER XL

THE HOME MARKET AND HOME TRADE.

TTJT7"J57 should keep our own market for our own producers,
wW seems by many to be regarded as the same kind
of a proposition as, We should keep our own pasture for
our own cows, whereas, in truth, it is such a proposition
as, We should keep our own appetites for our own cookery,
or, We should keep our own transportation for our own legs.

What is this home market from which protectionists
tell us we should so carefully exclude foreign produce!
Is it not the home demand the demand for the satisfac-
tion of our own wants f Hence the proposition that we
should keep our home market for home producers is
simply the proposition that we should keep our own
wants for our own powers of satisfying them. In short,
to reduce it to the individual, it is that we ought not to
eat a meal cooked by another, since that would deprive
us of the pleasure of cooking a meal for ourselves, or
make any use of horses or railways because that would
deprive our legs of employment.

A short time ago English protectionists (for protection
is far from dead in England) were censuring the govern-
ment for having given large orders for powder to
German instead of to English producers. It turned
out that the Germans were making a new powder called

103

104 PROTECTION OB FREE TRADE?

" cocoa," which in heavy guns gives great velocity with
low pressure, and with which all the Continental powers
had at once provided themselves. Had the English
government refused to buy from foreign producers,
English ships, in the event of war, which then seemed
imminent, would have been placed at a serious disad-
vantage.

Now, just as the policy of reserving home markets for
home producers would in war put a country which
should adhere to it at a great disadvantage even to the
extent, if fully carried out, of restricting the country
that does not produce coal to the use of sailing-ships,
and compelling the country that yields no iron to fight
with bows and arrows -so in all the vocations of peace
does this policy involve like disadvantages. Strictly to
reserve our home market for home producers would be
to exclude ourselves from participation in the advantages
which natural conditions or the peculiar skill of their
people give to other countries. If bananas will not grow
at home we must not eat bananas. If india-rubber is
not a home production we must not avail ourselves of its
thousand uses. If salt can be obtained in our country
only by evaporating sea-water we must continue so
to obtain our salt, although in other countries nature
has performed this work and provided already crystal-
lized salt in quantities sufficient not only for their people,
but for us too. Because we cannot grow the cinchona-
tree we must shake with ague and die from malarial
diseases, or must writhe in agony under the oculist's
knife because the beneficent drug that gives local insen-
sibility is not a home production. And so with all those
products in which the peculiar development of industry
has enabled the people of various countries to excel. To
reserve our home market to home production is to limit
the world from which our wants may be supplied to the

THE HOME MARKET AND HOME TRADE. 105

bounds of our own country, how little soever that may
be. And to place any restrictions upon importations is,
in so far as they operate, to deprive ourselves of oppor-
tunities to satisfy our wants.

It may be to the interest of a shopkeeper that the
people of his neighborhood should be prohibited from
buying from any one but him, so that they must take
such goods as he chooses to keep, at such prices as he
chooses to charge, but who would contend that this was
to the general advantage ? It might be to the interest of
gas-companies to restrict the number and size of win-
dows, but hardly to the interest of a community. Broken
limbs bring fees to surgeons, but would it profit a
municipality to prohibit the removal of ice from side-
walks in order to encourage surgery ? Yet it is in such
ways that protective tariffs act. Economically, what
difference is there between restricting the importation of
iron to benefit iron-producers and restricting sanitary
improvements to benefit undertakers ?

To attempt to make a nation prosperous by preventing
it from buying from other nations is as absurd as it
would be to attempt to make a man prosperous by pre-
venting him from buying from other men. How this
operates in the case of the individual we can see from
that practice which, since its application in the Irish land
agitation, has come to be called "boycotting." Captain
Boycott, upon whom has been thrust the unenviable
fame of having his name turned into a verb, was in fact
"protected." He had a protective tariff of the most
efficient kind built around him by a neighborhood decree
more effective than act of Parliament. No one would
sell him labor, no one would sell him milk or bread or
meat or any service or commodity whatever. But
instead of growing prosperous, this much-protected man
had to fly from a place where his own market was thus

106 PROTECTION OE FREE TRADE?

reserved for his own productions. What protectionists
ask us to do to ourselves in reserving our home market
for home producers, is in kind what the Land Leaguers
did to Captain Boycott. They ask us to boycott our-
selves.

In order to convince us that this would be for our
benefit, no little ingenuity has been expended. It is
asserted (1) that restrictions on foreign trade are bene-
ficial because home trade is more profitable than foreign
trade ; (2) that even if these restrictions do compel people
to pay higher prices for the same commodities, the real
cost is no greater, and (3) that even if the cost is greater
they get it back again.

Strangely enough, the first of these propositions is for-
tified by the authority of Adam Smith. In Book II., Chap,
ter V., of " The Wealth of Nations/' occurs this passage :

The capital which is employed in purchasing in one part of the
country in order to sell in another the produce of the industry of
that country, generally replaces by every such operation two distinct
capitals that had both been employed in the agriculture or manufac-
tures of that country, and thereby enables them to continue that
employment. . . . The capital which sends Scotch manufactures
to London, and brings back English corn and manufactures to Edin-
burgh, necessarily replaces by every such operation two British
capitals which had both been employed in the agriculture or manu-
factures of Great Britain.

The capital employed in purchasing foreign goods for home con-
sumption, when this purchase is made with the produce of domestic
industry, replaces, too, by every such operation, two distinct capi-
tals : but one of them only is employed in supporting domestic indus-
try. The capital which sends British goods to Portugal, and brings
back Portuguese goods to Great Britain, replaces by every such
operation only one British capital The other is a Portuguese one.
Though the returns, therefore, of the foreign trade of consumption
should be as quick as those of the home trade, the capital employed
in it will give but one-half the encouragement to the industry 01
productive labor of the country.

THE HOME MARKET AND HOME TRADE. 107

This astonishing proposition, of which Adam Smith
never seemed to see the significance,* is one of the incon-
sistencies into which he was led by his abandonment of
the solid ground from which labor is regarded as the
prime factor in production for that from which capital
is so regarded a confusion of thought which has ever
since befogged political economy. This passage is
quoted approvingly by protectionist writers, and made
by them the basis of assertions even more absurd, if that
be possible. Tet the fallacy ought to be seen at a glance.
It is of the same nature as the Irishman's division, " Two
for you two, and two for me, too/' and depends upon the
introduction of a term "British," which includes in its
meaning two of the terms previously used, " English n
and " Scotch." If we substitute for the terms used by
Adam Smith other terms of the same relation we may
obtain, with equal validity, such propositions as this : If
Episcopalians trade with Presbyterians, two profits are
made by Protestants ; whereas when Presbyterians trade
with Catholics only one profit goes to Protestants. There-
fore, trade between Protestants is twice as profitable as
trade between Protestants and Catholics.

* In the next paragraph Adam Smith goes on to carry this prop-
osition to an unconscious rcdwstio ad absurdum. He says :

"A capital therefore employed in the home trade will sometimes
make twelve operations, or be sent out and returned twelve times,
before a capital employed in the foreign trade of consumption has
made one. If the capitals are equal, therefore, the one will give
four-and-twenty times more encouragement and support to the
industry of the country than the other."

This is just such a proposition as that an innkeeper who permits
his guests to stay with him only one day can, with equal facili-
ties, furnish twelve times as much entertainment to man and beast
as can the innkeeper who permits each guest to stay with him twelve
days.

108 PROTECTION OE FREE TRADE?

In Adam Smith's illustration there are two quantities
of British goods, one in Edinburgh and one in London.
In the domestic trade which he supposes, these two
quantities of British goods are exchanged; but if the
Scotch goods be sent to Portugal instead of to England
and Portuguese goods brought back, only one quantity
of British goods is exchanged. There will be only one-
half the replacement in Great Britain, but there has been
only one-half the displacement. The Edinburgh goods
which have been sent away have been replaced with
Portuguese goods ; but the London goods have not been
replaced with anything, because they are still there. In
the one case twice the amount of British capital is
employed as in the other, and consequently double
returns show equal profitableness.

The arguments by which it is attempted to prove that
it is no hardship to a people to be forced to pay higher
prices to home producers for goods they can more
cheaply obtain by importation are of no better consis-
tency. The real cost of commodities, it is declared, is
not to be measured by their price but by the labor
needed to produce them, and hence, as it is put, though
higher wages, interest, taxes, etc., may make it impos-
sible to produce certain things for as low a price in one
country as in another, their real cost is no greater, if no
greater amount of labor is needed for their production,
and thus a nation loses nothing by shutting out the
cheaper foreign products.

The fallacy is in the assumption that equal amounts of
labor always produce equal results. A first-class portrait-
painter may be able to do whitewashing with no more
labor than a professional whitewasher, but it would
nevertheless be a loss to him to take time in which he
might earn the wages of a portrait-painter in order to do
whitewashing that he might get done for the wages of a

THE HOME MARKET AND HOME TRADE. 109

whitewashes Nor would his loss be the less real if he
chose to average his income so as to credit himself with
as much for whitewashing as for portrait-painting. In
the same way, it is not the amount of labor required to
produce a thing here or there which determines whether
it can be more profitably obtained by home production
or by importation, but the relation between what the
same labor could produce in that and in other employ-
ments. This is shown by price. Though as between
different times and places the prices of things do not
accurately indicate the relative quantity and quality of
labor necessary to obtain them, they do in the same time
and place. If at any given time, in any given place, a
certain commodity cannot be produced for as low a price
as it can be imported for, this is not necessarily proof
that it would take more labor to produce it in the given
place, but it is proof that labor there and then can be
more profitably employed. And when industry is
diverted from more profitable to less profitable occupa-
tions, though the capital and labor so transferred may be
compensated by duties or bounties, there must be a loss
to the people as a whole.

The argument that the higher prices which the tariff
enables certain home producers to charge involve no loss
to those who pay them is thus put by Horace Greeley
("Political Economy," p. 150) :

I never made any iron, nor had any other than a public, general
interest in making any, while I have bought and used many thou-
sands of dollars 7 worth, in the shape of power-presses, engines,
boilers, building-plates, etc. It is to my interest, you say, to have
cheap iron. Certainly ; but I buy iron, not (ultimately and really)
with money, but with the product of my labor that is, with news-
papers ; and I can better afford to pay $70 per ton for iron made by
men who can and do buy American newspapers than take it for $50
of those who rarely see and never buy one of my products. The
money price of the American iron may be higher, but its real cost

110 PROTECTION OB FREE TRADE!

to me is less than that of the British iron. And my case is that o!
the great body of American farmers and other producers of exchange*
able wealth.

The fallacy is in the assumption that the ability of
certain persons to buy American newspapers depends
upon their making of iron, whereas it depends upon
their making of something. Newspapers are not bought
with iron, nor do newspaper publishers buy iron with
newspapers. These transactions are effected with money,
which represents no single form of wealth, but value in
all forms. If, instead of making iron, the men to whom
Mr. Greeley refers had made something else which was
exchanged for British iron, Mr. Greeley's purchase of
this foreign iron would have been just as truly an
exchange of his products for theirs. The $20 per ton
additional which the tariff compelled him to pay for iron
represented a loss to him which was not a gain to any
one else. For on Mr. Greeley's supposition that the
tariff was necessary to give American iron-makers the
same remuneration such labor could have obtained in
other pursuits, its effect was simply to compel the
expenditure of $70 worth of labor to obtain what other-
wise could have been obtained by $50 worth of labor.
To do this was necessarily to lessen the wealth of the
country as a whole, and to reduce the fund available for
the purchase of newspapers and other articles. This
loss is as certain and is of the same kind as if Mr.
Greeley had been compelled to employ portrait-painters
to do whitewashing.

The more popular forms of this argument that protec-
tion costs nothing, hardly need analysis. If, as is
asserted, consumers lose nothing in the higher prices the
tariff compels them to pay, because these prices are paid
to our own people, then producers would lose nothing if
compelled to sell to their fellow-citizens below cost. If

THE HOME MARKET AND HOME TRADE. Ill

workmen are necessarily compensated for high-priced
goods by the increased demand for their labor, then man-
ufacturers would be compensated for high-priced labor by
the increased demand for their goods. In short, on this
reasoning it makes no difference to anybody whether the
price of anything is high or low. When farmers com-
plain of the high charges of railroads, they are making
much ado about nothing; and workmen are taking need-
less trouble when they demand an increase of wages,
while employers are quite as foolish when they try to cut
wages down.

CHAPTER XII.

EXPORTS AND IMPORTS.

ri\tLE aim of protection is to diminish imports, never
JL to diminish exports. On the contrary, the protec-
tionist habit is to regard exports with favor, and to con-
sider the country which exports most and imports least
as doing the most profitable trade. When exports
exceed imports there is said to be a favorable balance
of trade. When imports exceed exports there is said to
be an unfavorable balance of trade. In accordance with
his idea all protectionist countries afford every facility
for sending things away and fine men for bringing
things in.

If the things which we thus try to send away and
prevent coming in were pests and vermin things of
which all men want as little as possible this policy
would conform to reason. But the things of which
exports and imports consist are not things that nature
forces on us against our will, and that we have to strug-
gle to rid ourselves of ; but things that nature gives only
in return for labor, things for which men make exer-
tions and undergo privations. Him who has or can
command much of these things we call rich ; him who
has little we call poor ; and when we say that a country
increases in wealth we mean that the amount of these
things which it contains increases faster than its popula-
tion. What, then, is more repugnant to reason than the

112

EXPORTS AND IMPORTS. 113

notion that the way to increase the wealth of a country
is to promote the sending of such things away and to
prevent the bringing of them in? Could there be a
queerer inversion of ideas? Should we not think even
a dog had lost his senses that snapped and snarled when
given a bone, and wagged his tail when a bone was taken
from him ?

Lawyers may profit by quarrels, doctors by diseases,
rat-catchers by the prevalence of vermin, and so it may
be to the interest of some of the individuals of a nation
to have as much as possible of the good things which we
call " goods " sent away, and as little as possible brought
in. But protectionists claim that it is for the benefit of
a community, as a whole, of a nation considered as one
man, to make it easy to send goods away and difficult to
bring them in.

Let us take a community which we must perforce con-
sider as a whole that country, with a population of one,
which the genius of De Foe has made familiar not only
to English readers but to the people of all European
tongues.

Robinson Crusoe, we will suppose, is still living alone
on his island. Let us suppose an American protectionist
is the first to break his solitude with the long yearned-f or
music of human speech. Crusoe's delight we can well
imagine. But now that he has been there so long he
does not care to leave, the less since his visitor tells him
that the island, having now been discovered, will often be
visited by passing ships. Let us suppose that after hav-
ing heard Crusoe's story, seen his island, enjoyed such
hospitality as he could offer, told him in return of the
wonderful changes in the great world, and left him books
and papers, our protectionist prepares to depart, but
before going seeks to offer some kindly warning of the
danger Crusoe will be exposed to from the "deluge of

114 PROTECTION OB FREE TRADE!

cheap goods" that passing ships will seek to exchange
for fruit and goats. Imagine him to tell Crusoe just
what protectionists tell larger communities, and to warn
him that, unless he takes measures to make it difficult to
bring these goods ashore, his industry will be entirely
ruined. "In fact," we may imagine the protectionist to
say, "so cheaply can all the things you require be pro-
duced abroad that unless you make it hard to land them
I do not see how you will be able to employ your own
industry at all."

" Will they give me all these things 1 " Robinson Crusoe
would naturally exclaim. " Do you mean that I shall get
all these things for nothing and have no work at all to
do T That will suit me completely. I shall rest and read
and go fishing for the fun of it. I am not anxious to
work if without work I can get the things I want."

"No, I don't quite mean that," the protectionist would
be forced to explain. "They will not give you such
things for nothing. They will, of course, want some-
thing in return. But they will bring you so much and
will take away so little that your imports will vastly
exceed your exports, and it will soon be difficult for you
to find employment for your labor."

" But I don't want to find employment for my labor,"
Crusoe would naturally reply. " I did not spend months
in digging out my canoe and weeks in tanning and sew-
ing these goatskins because I wanted employment for
my labor, but because I wanted the things. If I can get
what I want with less labor, so much the better, and the
more I get and the less I give in the trade you tell me I
am to carry on or, as you phrase it, the more my
imports exceed my exports the easier I can live and the
richer I shall be. I am not afraid of being overwhelmed
with goods. The more they bring the better it will suit
me.*

EXPORTS AND IMPORTS. 115

And so the two might part, for it is certain that no
matter how long our protectionist talked the notion that
his industry would be ruined by getting things with less
labor than before would never frighten Crusoe.

Yet, are these arguments for protection a whit more
absurd when addressed to one man living on an island
than when addressed to sixty millions living on a con-
tinent? What would be true in the case of Robinson
Crusoe is true in the case of Brother Jonathan. If for-
eigners will bring us goods cheaper than we can make
them ourselves, we shall be the gainers. The more we
get in imports as compared with what we have to give in
exports, the better the trade for us. And since foreigners
are not liberal enough to give us their productions, but
will only let us have them in return for our own produc-
tions, how can they ruin our industry? The only way
they could ruin our industry would be by bringing us
for nothing all we want, so as to save us the necessity
for work. If this were possible, ought it seem very
dreadful?

Consider this matter in another way : To impose taxes
on exports in order that home consumers might get the
advantage of lower prices would be quite as just as to
impose taxes on imports in order that home producers
may get the advantage of higher prices, and it would be
far more conformable to the principle of " the greatest
good of the greatest number," since all of us are con-
sumers, while only a few of us are producers of the
things that can be raised in price by taxes on imports.
And since the wealthy country is the country that in
proportion to its population contains the largest quanti.
ties of the things of which exports and imports consist,
it would be a far more plausible method of national en-
richment to keep such things from going out than to keep
them from coming in.

116 PROTECTION OR FREE TRADE!

Now, supposing it were seriously proposed, as a means
for enriching the United States, to put restrictive duties
on the carrying out of wealth instead of the bringing in
of wealth. It is certain that this would be opposed by
protectionists. But what objection could they make f

The objection they would make would be in substance
this: "The sending away of things in trade from one
country to another does not involve a loss to the country
from which they are sent, but a gain, since other things
of more value are brought back in return for them.
Therefore, to place any restriction upon the sending
away of things would be to lessen instead of to increase
the wealth of a country." This is true. But to say this,
is to say that to restrict exports would be injurious
because it would diminish imports. Yet, to diminish
imports is the direct aim and effect of protective tariffs.

Exports and imports, so far as they are induced by
trade, are correlative. Each is the cause and comple-
ment of the other, and to impose any restrictions on the
one is necessarily to lessen the other. And so far from
its being the mark of a profitable commerce that the
value of a nation's exports exceeds her imports, the
reverse of this is true.

In a profitable international trade the value of imports
will always exceed the value of the exports that pay for
them, just as in a profitable trading voyage the return
cargo must exceed in value the cargo carried out. This
is possible to all the nations that are parties to commerce,
for in a normal trade commodities are carried from places
where they are relatively cheap to places where they are
relatively dear, and their value is thus increased by the
transportation, so that a cargo arrived at its destination
has a higher value than on leaving the port of its expor-
tation. But on the theory that a trade is profitable only
when exports exceed imports, the only way for all coun-

EXPORTS AND IMPORTS. 117

tries to trade profitably with one another would be to
carry commodities from places where they are relatively
dear to places where they are relatively cheap. An inter-
national trade made up of such transactions as the expor-
tation of manufactured ice from the West Indies to New
England, and the exportation of hothouse fruits from
New England to the West Indies, would enable all coun-
tries to export much larger values than they imported.
On the same theory the more ships sunk at sea the better
for the commercial world. To have all the ships that
left each country sunk before they could reach any other
country would, upon protectionist principles, be the
quickest means of enriching the whole world, since all
countries could then enjoy the maximum of exports with
the minimum of imports.

It must, however, be borne in mind that all exporting
and importing are not the exchanging of products.
This, however, is a fact which puts in still stronger light,
if that be possible, the absurdity of the notion that an
excess of exports over imports shows increasing wealth.
When Rome was mistress of the world, Sicily, Spain,
Africa, Egypt, and Britain exported to Italy far more
than they imported from Italy. But so far from this
excess of their exports over their imports indicating
their enrichment, it indicated their impoverishment. It
meant that the wealth produced in the provinces was
being drained to Borne in taxes and tribute and rent, for
which no return was made. The tribute exacted by
Germany from France in 1871 caused a large excess of
French exports over imports. So in India the "home
charges " of an alien government and the remittances of
alien officials secure a permanent excess of exports over
imports. So the foreign debt which has been fastened
upon Egypt requires large amounts of the produce of
that country to be sent away for which there is no

118 PROTECTION OB FREE TRADE!

return in imports. And so for many years the exports
from Ireland have largely exceeded the imports into
Ireland, owing to the rent drain of absentee landlords.
The Irish landlords who live abroad do not directly draw
produce for their rent, nor yet do they draw money.
Irish cattle, hogs, sheep, butter, linen and other produc-
tions are exported as if in the regular course of trade,
but their proceeds, instead of coming back to Ireland as
imports, are, through the medium of bank and mercan-
tile exchanges, placed to the credit of the absent land-
lords, and used up by them. This drain of commodities
in return for which no commodities are imported, would
be greater yet were it not for the fact that thousands of
Irishmen cross the Channel every summer to help get in
the English harvests, and then return home, and that
from those who have permanently emigrated to other
countries there is a constant stream of remittances to
relatives left behind.*

The last time I crossed to England I sat at the steamer
table by two young Englishmen, who drank much cham-
pagne and in other ways showed they had plenty of
money. As we became acquainted I learned that they
were younger sons of English " county families/' gradu-
ates of a sort of school which has been established in

* In Dublin in 1882 I several times met the secretary of one of
the great banking institutions whose branches ramify through Ire-
land. Each time he asked my opinion of the crop prospects in the
United States, as though that were uppermost in his mind whenever
he met an American. Finally I said to him, " I suppose poor crops in
the United States would be to your advantage, as they would increase
the value of the agricultural products that Ireland exports." "Oh,
no," he replied ; "we are greatly interested in having the American
crops good. Good crops mean good times, and good times in the
United States mean large remittances from the Irish in America to
their families at home, and these remittances are more important
to business here than the prices we get for our own products."

EXPORTS AND IMPORTS. 119

Iowa for wealthy young Englishmen who wish to become
"gentlemen farmers" or "estate-owners" in the United
States. Each had got him a considerable tract of new
land, had cut it up into farms, erected on each farm a
board house and barn, and then rented these farms to
tenants for half the crops. They liked America, they
said ; it was a good country to have an estate in. The
land laws were very good, and if a tenant did not pay
promptly you could get rid of him without long formal-
ity. But they preferred to live in England, and were
going back to enjoy their incomes there, having put their
affairs in the hands of an agent, to whom the tenants
were required to give notice when they wished to reap
their crops, and who saw that the landlord's half was
properly rendered. Thus in this case half the crop (less
commissions) of certain Iowa farmers must annually be
exported without any return in imports. And this tide
of exports for which no imports come back is only
commencing to flow. Many Englishmen already own
American land by the hundred thousand, and even by
the million acres, and are only beginning to draw rent
and royalties. Punch recently had a ponderous joke, the
point of which was that the British House of Lords had
much greater landed interests in the United States than
in Great Britain. If not true already, it will not under
present conditions be many years before the English
aristocracy will draw far larger incomes from their
American estates than from their home estates incomes
to supply which we must export without any return in
imports.*

* The Chicago Tribune of January 25, 1886, contains a long account
of the American estates of an Irish landlord, William Scully. This
Scully, who was one of the most notorious of the rack-renting and
evicting Irish landlords, owns from 75,000 to 90,000 acres of the
richest land in Illinois, besides large tracts in other States. Hi*

120 PROTECTION OR FREE TRADE!

In the commerce which goes on between the United
States and Europe there are thus other elements than
the exchange of productions. The sums borrowed of
Europe by the sale of railway and other bonds, the sums
paid by Europeans for land in the United States or
invested in industrial enterprises here, capital brought by
emigrants, what is spent by Europeans traveling here, and
some small amounts of the nature of gifts, legacies, and
successions tend to swell our imports or reduce our exports.

On the other hand, not only do we pay in exports to
Europe for our imports from Brazil, India, and such
countries, but interest on bonds and other obligations,
profits on capital invested here, rent for American land
owned abroad, remittances from immigrants to relatives
at home, property passing by will or inheritance to
people abroad, payments for ocean transportation
formerly carried on by our own vessels but now carried
on by foreign vessels, the sums spent by American
tourists who every year visit Europe, and by the increas-
ing number of rich Americans who live in Europe, all
contribute to swell our exports and reduce our imports.

estates are cut up into farms and rented to tenants who are obliged
to pay all taxes and make all improvements, and who are not per-
mitted to sell their crops until the rent is paid. A "spy system is
maintained, and tenants are required to doff their hats when they
enter the "estate office." The Tribune describes them as reduced
to a condition of absolute serfdom. The houses in which they live
are the poorest shanties, consisting generally of a room and a half,
and the whole district is described as blighted. Scully got most of
his land at nominal prices, ranging as low as seventy-five cents per
acre. He lives in London, and is said to draw from his American
estates a net income of $400,000 a year, which means, of course,
that American produce to that value is exported every year without
any imports coming back. The Tribune closes its long account by
saying: "Not content with acquiring land himself, Scully has
induced a number of his relatives to become American landlords,
and their system is patterned on his own."

EXPORTS AND IMPORTS. 121

The annual balance against us on these accounts is
already very large and is steadily growing larger. Were
we to prevent importations absolutely we should still
have to export largely in order to pay our rents, to meet
interest, and to provide for the increasing number of
rich Americans who travel or reside abroad. But the
fact that our exports must now thus exceed our imports
instead of being what protectionists take it for, an evi-
dence of increasing prosperity, is simply the evidence of
a drain upon national wealth like that which has so
impoverished Ireland.

But this drain is not to be stopped by tariffs. It pro-
ceeds from a deeper cause than any tariff can touch, and
is but part of a general drift. Our internal commerce also
involves the flow from country to city, and from West to
East, of commodities for which there is no return. Our
large mine-owners, ranch-owners, land speculators, and
many of our large farmers, live in the great cities. Our
small farmers have had in large part to buy their farms
on mortgage of men who live in cities to the east of
them ; the bonds of the national, State, county, and muni-
cipal governments are largely so held, as are the stocks
and bonds of railway and other companies the result
being that the country has to send to the cities, the West
to the East, more than is returned. This flow is increas-
ing, and, no matter what be our tariff legislation, must
continue steadily to increase, for it springs from the
most fundamental of our social adjustments, that which
makes land private property. As the land in Illinois, or
Iowa, or Oregon, or New Mexico owned by a resident of
New York or Boston increases in value, people who live
in those States must send more and more of their prod-
uce to the New Yorker or Bostonian. They may work
hard, but grow relatively poorer ; he may not work at all,
but grow relatively richer, so that when they need capital

122 PROTECTION OB FBEE TBADEf

for building railroads or any other purpose, they must
borrow and pay interest, while he can lend and get
interest The tendency of the time is thus to the owner-
ship of the whole country by residents of cities, and it
makes no difference to the people of the country districts
whether those cities are in America or Europe.

CHAPTER XIIL

CONFUSIONS ARISING FROM THE USE OF MONEY.

fTlHEEE is no one who in exchanging his own produc-
JL tions for the productions of another would think
that the more he gave and the less he got the better off
he would be. Yet to many men nothing seems clearer
than that the more of its own productions a nation sends
away, and the less of the productions of other nations it
receives in return, the more profitable its trade. So
wide-spread is this belief that to-day nearly all civilized
nations endeavor to discourage the bringing in of the
productions of other nations while regarding with satis-
faction the sending away of their own.

What is the reason of this ? Men are not apt to apply
to the transactions of nations principles opposite to those
they apply to individual transactions. On the contrary,
the natural tendency is to personify nations, and to
think and speak of them as actuated by the same motives
and governed by the same laws as the human beings of
whom they are made up. Nor have we to look far to see
that the preposterous notion that a nation gains by
exporting and loses by importing actually arises from
the application to the commerce between natiojis of ideas
to which individual transactions accustom civilized men.
What men dispose of to others we term their sales ; what
they obtain from others we term their purchases. Hence
we become accustomed to think of exports as sales, and

123

124 PROTECTION OB PEEE TRADE!

of imports as purchases. And as in daily life we habitu
ally think that the greater the value of a man's sales and
the less the value of his purchases the better his busi-
ness; so, if we do not stop to fix the meaning of the
words we use, it seems a matter of course that the more
a nation exports and the less it imports the richer it will
become.

It is significant of its origin that such a notion is
unknown among savages. Nor could it have arisen
among civilized men if they were accustomed to trade as
savages do. Not long ago a class of traders called
" soap-fat men " used to go from house to house exchang-
ing soap for the refuse fat accumulated by housewives.
In this petty commerce, carried on in this primitive
manner, the habit of thinking that in a profitable trade
the value of sales must exceed the value of purchases
could never have arisen, it being clearly to the interest of
each party that the value of what he sold (or exported)
should be as little as possible, and the value of what he
bought (or imported) as great as possible. But in civi-
lized society this is only the exceptional form of trade.
Buying and selling, as our daily life familiarizes us with
them, are not the exchange of commodities for commodi-
ties, but the exchange of money for commodities, or of
commodities for money.

It is to confusions of thought growing out of this use
of money that we may trace the belief that a nation
profits by exporting and loses by importing a belief to
which countless lives and incalculable wealth have been
sacrificed in bloody wars, and which to-day molds the
policy of nearly all civilized nations and interposes arti-
ficial barriers to the commerce of the world.

The primary form of trade is barter the exchange of
commodities for commodities. But just as when we
begin to think and speak of length, weight or bulk, it is

CONFUSIONS ARISING FROM THE USE OF MONEY. 126

necessary to adopt measures or standards by which these
qualities can be expressed, so when trade begins there
arises a need for some common standard by which the
value of different articles can be apprehended. The
difficulties attending barter soon lead, also, to the adop-
tion by common consent of some commodity as a
medium of exchange, by means of which he who wishes
to exchange a thingf or one or more other things is no longer
obliged to find some one with exactly reciprocal desires,
but is enabled to divide the complete exchange into
stages or steps, which can be made with different per-
sons, to the enormous saving of time and trouble.

In primitive society, cattle, skins, shells and many
other things have in a rude way fulfilled these functions.
But the precious metals are so peculiarly adapted to this
use that wherever they have become known mankind has
been led to adopt them as money. They are at first used
by weight, but a great step in advance is taken when
they are coined into pieces of definite weight and purity,
so that no one who receives them needs to take the
trouble of weighing and testing them. As civilization
advances, as society becomes more settled and orderly,
and exchanges more numerous and regular, gold and
silver are gradually superseded as mediums of exchange
by credit in various forms. By means of accounts cur-
rent, one purchase is made to balance another purchase
and one debt to cancel another debt. Individuals or
associations of recognized solvency issue bills of ex-
change, letters of credit, notes and drafts, which largely
take the place of coin; banks transfer credits between
individuals, and clearing-houses transfer credits between
banks, so that immense transactions are carried on with
a very small actual use of money ; and finally, credits of
convenient denominations, printed upon paper, and
adapted to transference from hand to hand without

126 PROTECTION OR PEEE TRADE!

indorsement or formality, being cheaper and more con<
venient, take in part or in whole the place of gold or
silver in the country where they are issued.

This is, in brief, the history of that labor-saving instru-
ment which ranges in its forms from the cowries of the
African or the wampum of the red Indian to the bank-
note or greenback, and which does so much to facilitate
trade that without it civilization would be impossible.
The part which it plays in social life and intercourse is
so necessary, its use is so common in thought and speech
and actual transaction, that certain confusions with
regard to it are apt to grow up. It is not needful to
speak of the delusion that interest grows out of the use
of money, or that increase of money is increase of
wealth, or that paper money cannot properly fulfil its
functions unless an equivalent of coin is buried some-
where, but only of such confusions of thought as have a
relation to international trade.

I was present yesterday when one farmer gave another
farmer a horse and four pigs for a mare. Both seemed
pleased with the transaction, but neither said, "Thank
you." Yet when money is given for anything else it is
usual for the person who receives the money to say,
" Thank you/ 7 or in some other way to indicate that he
is more obliged in receiving the money than the other
party is in receiving the thing the money is given for
This custom is one of the indications of a habit of
thought which (although it is clear that a dollar cannot
be more valuable than a dollar's worth) attaches the idea
of benefit more to the giving of money for commodities
than to the giving of commodities for money.

The main reason of this I take to be that difficulties of
exchange are most felt on the side of reduction to the
medium of exchange. To exchange anything for money
it is necessary to find some one who wants that particular

CONFUSIONS ARISING PEOM THE USE OF MONEY. 127

thing, but, this exchange effected, the exchange of money
for other things is generally easier, since all who have
anything to exchange are willing to take money for it.
This, and the fact that the value of money is more cer-
tain and definite than the value of things measured by
it, and the further fact that the sale or conversion of
commodities into money completes those transactions
upon which we usually estimate profit, easily lead us
to look upon the getting of money as the object and
end of trade, and upon selling as more profitable than
buying.

Further than this, money, being the medium of
exchange the thing that can be most quickly and easily
exchanged for other things is, therefore, the most con-
venient in contingencies. In ruder times, before the
organization of credit had reached such development as
now, when the world was cut up into small states con-
stantly warring with each other, when order was less
well preserved, property far more insecure and the exhi-
bition of riches often led to extortion; when pirates
infested the sea and robbers the land; when fires were
frequent and insurance had not been devised; when
prisoners were held to ransom and captured cities given
up to sack, the contingencies in which it is important
to have wealth in the form in which it can be most
conveniently carried, readily concealed and speedily
exchanged, were far more numerous than now, and
every one strove to keep some part of his wealth in the
precious metals. The peasant buried his savings, the
merchant kept his money in his strong box, the miser
gloated over his golden hoard and the prince sought to
lay up a great treasure for time of sudden need. Thus
gold and silver were even more striking symbols of
wealth than now, and the habit of thinking of them as
the only real wealth was formed.

128 PBOTECTION OB FREE TBADEf

This habit of thought gave ready support to the pro-
tective policy. When the growth of commerce made it
possible to raise large revenues by indirect taxation, kings
and their ministers soon discovered how easily the people
could thus be made to pay an amount of taxes that they
would have resisted if levied directly. Import taxes
were first levied to obtain revenue, but not only was it
found to be exceedingly convenient to tax goods in
the seaport towns from whence they were distributed
through the country, but the taxation of imported goods
met with the warm support of such home producers as
were thus protected from competition. An interest was
thus created in favor of " protection," which availed itself
of national prejudices and popular habits of thought,
and a system was by degrees elaborated, which for cen-
turies swayed the policy of European nations.

This system, which Adam Smith attacked under the
name of the mercantile system of political economy,
regarded nations as merchants competing with each
other for the money of the world, and aimed at enriching
a country by bringing into it as much gold and silver as
possible, and permitting as little as possible to flow out.
To do this it was sought not only to prohibit the carry-
ing of precious metals out of the country, but to encour-
age the domestic production of goods that could be sold
abroad, and to throw every obstacle in the way of similar
foreign or colonial industries. Not only were heavy
import duties or absolute prohibitions placed on such
products of foreign industry as might come into competi-
tion with home industry, but the exports of such raw
materials as foreign industries might require were bur-
dened with export duties or entirely prohibited under
savage penalties of death or mutilation. Skilled work-
men were forbidden to leave the country lest they might
teach foreigners their art; domestic industries were

CONFUSIONS ARISING PROM THE USE OF MONEY. 129

encouraged by bounties, by patents of monopoly and by
the creation of artificial markets sometimes by pre-
miums paid on exports, and sometimes by laws which
compelled the use of their products. One instance of
this was the act of Parliament which required every
corpse to be buried in a woolen shroud, a piece of
stupidity only paralleled by the laws under which the
American people are taxed to bury in underground safes
$2,000,000 of coined silver every month, and keep a
hundred millions of gold lying idle in the treasury.

But to attempt to increase the supply of gold and
silver by such methods is both foolish and useless.
Though the value of the precious metals is high their
utility is low ; their principal use, next to that of money,
being in ostentation. And just as a farmer would
become poorer, not richer, by selling his breeding-stock
and seed-grain to obtain gold to hoard and silver to
put on his table, or as a manufacturer would lessen his
income by selling a useful machine and keeping in his
safe the money he got for it, so must a nation lessen its
productive power by stimulating its exports or reducing
its imports of things that could be productively used, in
order to accumulate gold and silver for which it has no
productive use. Such amounts of the precious metals as
are needed for use as money will come to every nation
that participates in the trade of the world, by virtue of a
tendency that sets at naught all endeavors artificially to
enhance supply, a tendency as constant as the tendency
of water to seek a level. Wherever trade exists all corn*
modities capable of transportation tend to flow from
wherever their value is relatively low to wherever their
value is relatively high. This tendency is checked by
the difficulties of transportation, which vary with differ-
ent things as their bulk, weight and liability to injury
compare with their value. The precious metals do not

130 PBOTECTION OK FREE TRADE!

suffer from transportation, and having (especially gold)
little weight and bulk as compared with their value, are
so portable that a very slight change in their relative
value is sufficient to cause their flow. So easily can they
be carried and concealed that legal restrictions, backed
by coast-guards and custom-house officials, have never
been able to prevent them from finding their way out of
a country where their value was relatively low and into
a country where their value was relatively high. The
attempts of her despotic monarchs to keep in Spain the
precious metals she drew from America were like trying
to hold water in a sieve.

The effect of artificially increasing the supply of pre-
cious metals in any country must be to lower their value
as compared with that of other commodities. The
moment, therefore, that restrictions by which it is
attempted to attract and retain the precious metals,
begin so to operate as to increase the supply of those
metals, a tendency to their outflowing is set up, increas-
ing in force as the efforts to attract and retain them*
become more strenuous. Thus all efforts artificially to
increase the gold and silver of a country have had no
result save to hamper industry and to make the country
that engaged in them poorer instead of richer. This,
experience has taught civilized nations, and few of them
now make any direct efforts to attract or retain the pre-
cious metals, save by uselessly hoarding them in burglar-
proof vaults as we do.

But the notion that gold and silver are the only true
money, and that as such they have a peculiar value, still
underlies protectionist arguments,* and the habit of asso-

* FOP instance, Professor Thompson writing where and when,
save for subsidiary tokens, paper money was exclusively used, and
so conscious of its ability to perform all the functions of money that
he declares it to be as much superior to coin as the railway is to the

CONFUSIONS ARISING FROM THE USE OF MONEY. 131

elating incomes with sales, and expenditure with pur-
chases, which is formed in the thought and speech of
every-day life, still disposes men to accept a policy
which aims at restricting imports by protective tariffs.
Being accustomed to measure the profits of business men
by the excess of their sales over their purchases, the
assumption that the exports of a nation are equivalent
to the sales of a merchant, and its imports to his pur-
chases, leads easily to the conclusion that the greater the
amount of exports and the less the amount of imports,
the more profit a nation gets by its trade.*

Yet it needs only attention to see that this assumption
involves a confusion of ideas. When we say that a mer-
chant is doing a profitable business because his sales exceed
his purchases, what we are really thinking of as sales is not
the goods he sends out, but the money that we infer he
takes in in exchange for them ; what we are really think-
ing of as purchases is not the goods he takes in, but the
money we infer he pays out. We mean, in short, that
he is growing richer because his income exceeds his
outgo. We become so used in ordinary affairs to this
transposition of terms by inference, that when we think
of a nation's exports as its sales and of its imports as its
purchases, habit leads us to attach to these words the

stage-coach ("Political Economy," p. 152), goes on subsequently
(p. 223) to contend that protective duties are necessary to prevent the
poorer country being drained of its money by the richer country,
thus tacitly assuming that gold and silver alone are money since
neither he nor any one else would pretend that one country could
drain another of its paper money.

* A conclusion frequently carried by protectionists to the most
ridiculous lengths, as, for instance, in the recent declaration of a
protectionist Senator (William M. Evarts of New York), that he
would be ready for free trade "when protection had so far developed
all our industries that the United States could sell in competition
with all the world, and at the same time be free from the necessity
of buying anything from all the world."

132 PROTECTION OB FREE TRADE!

same inferential meaning, and thus unconsciously to
give to a word expressive of outgoing, the significance
of incoming j and to a word expressive of incoming, the
significance of outgoing. But, manifestly, when we
compare the trade of a merchant carried on in the usual
way with the trade of a nation, it is not the goods that a
merchant sells, but the money that he pays out, that is
analogous to the exports of a country; not the goods
that he buys, but the money he takes in, that is analo-
gous to imports. It is only where the trade of a mer-
chant is carried on by the exchange of commodities for
commodities, that the commodities he sells are analogous
to the exports, and the commodities he buys are analo-
gous to the imports of a nation. And the village dealer
who exchanges groceries and dry-goods for eggs, poultry
and farm produce, or the Indian trader who exchanges
manufactured goods for furs, is manifestly doing the
more profitable business the more the value of the com-
modities he takes in (his imports) exceeds the value of
the goods he gives out (his exports).

The fact is, that all trade in the last analysis is simply
what it is in its primitive form of barter, the exchange of
commodities for commodities. The carrying on of trade
by the use of money does not change its essential char-
acter, but merely permits the various exchanges of which
trade is made up to be divided into parts or steps, and
thus more easily effected. When commodities are
exchanged for money, but half a full exchange is com-
pleted. When a man sells a thing for money it is to use
the money in buying some other thing and it is only as
money has this power that any one wants or will take it.
Our common use of the word " money " is largely meta-
phorical. We speak of a wealthy man as a moneyed
man, and in talking of his wealth say that he has so
much " money/' whereas the fact probably is, that though

CONFUSIONS ARISING FROM THE USE OF MONET. 133

he may be worth millions, he never has at any one time
more than a few dollars, or at most a few hundred dol-
lars, in his possession. His possessions really consist of
houses, lands, goods, stocks, or of bonds or other obliga-
tions to pay money. The possession of these things we
speak of as the possession of money because we habitually
estimate their value in money. If we habitually esti-
mated value in shells, sugar or cattle, we would speak of
rich men as having much of these, just as the use of
postage-stamps as currency at the beginning of our civil
war led to speaking of rich men in the slang of the day,
as those who had plenty of " stamps." And so, when a
merchant is doing a profitable business, though we speak
of him as making or accumulating money, the fact is,
save in very rare cases, that he is putting out money as
fast as he gets it in. The shrewd business man does not
stow away money. On the contrary, with the money he
obtains from his sales he hastens to make other pur-
chases. If he does not buy commodities for use in his
business, or commodities or services for personal gratifi-
cation, he buys lands, houses, stocks, bonds, mortgages
or other things from which he expects a profitable return.
The trade between nations, made up as it is of numer-
ous individual transactions which separately are but parts
or steps in a complete exchange, is in the aggregate, like
the primitive form of trade, the exchange of commodities
for commodities. Money plays no part in international
trade, and the world has yet to reach that stage of civi-
lization which will give us international money. The
paper currency which in all civilized nations now con-
stitutes the larger part of their money, is never exported
to settle balances, and when gold or silver coin is
exported or imported it is as a commodity, and its value
is estimated at that of the bullion contained. What each
nation imports is paid for in the commodities which it

134 PROTECTION OB FREE TRADE?

exports, unless received as loans or investments, or as
interest, rent or tribute. Before commerce had reached
its present refinement of division and sub-division this
was in many individual cases clear enough. A vessel
sailed from New York, Philadelphia or Boston carrying,
on account of owner or shipper, a cargo of flour, lumber
and staves to the West Indies, where it was sold, and the
proceeds invested in sugar, rum and molasses, which
were brought back, or which, perhaps, were carried to
Europe, there sold, and the proceeds invested in Euro-
pean goods, which were brought home. At present the
exporter and importer are usually different persons, but
the bills of exchange drawn by the one against goods
exported are bought by the other, and used to pay for
goods imported. So far as the country is concerned, the
transaction is the same as though importers and exporters
were the same persons, and that imports exceed exports
in value is no more proof of a losing trade than that in
the old times a trading ship brought home a cargo worth
more than that she carried out was proof of an unprofi*
table voyage.

CHAPTER XIV.

DO HIGH WAGES NECESSITATE PROTECTION!

IN the United States, at present, protection derives
strong support from the belief that the products of
the lower-paid labor of other countries could undersell
the products of our higher-paid labor if free competition
were permitted. This belief not only leads working-men
to imagine protection necessary to keep up wages a
matter of which I shall speak hereafter; but it also
induces the belief that protection is necessary to the
interests of the country at largea matter which now
falls in our way.

And f gather than concerns the tariff this belief has
important bearings. It enables employers to persuade
themselves that they are serving general interests in
reducing wages or resisting their increase, and greatly
strengthens the opposition to the efforts of working-men
to improve their condition, by setting against them a
body of opinion that otherwise would be neutral, if not
strongly in their favor. This is clearly seen in the case
of the eight-hour system. Much of the opposition to
this great reform arises from the belief that the increase
of wages to which such a reduction of working-hours
would be equivalent, would place the United States at a
great disadvantage in production as compared with other
countries.

135

136 PROTECTION OB FREE TRADE!

It is evident that even those who most vociferously
assert that we need a protective tariff on account of our
higher standard of wages do not really believe it them-
selves. For if protection be needed against countries of
lower wages, it must be most needed against countries
of lowest wages and least needed against countries of
highest wages. Now, against what country is it that
American protectionists most demand protection ? If we
could have a protective tariff against only one country in
the whole world, what country is it that American pro*
tectionists would select to be protected against ? Unques-
tionably it is Great Britain. But Great Britain, instead
of being the country of lowest wages, is, next to the
United States and the British colonies, the country of
highest wages.

" It is a poor rule that will not work both ways/ 7 If
we require a protective tariff because of our high wages,
then countries of low wages require free trade or, art
the very least, have nothing to fear from free trade
How is it, then, that we find the protectionists of France,
Germany and other low-wage countries protesting that
their industries will be ruined by the free competition
of the higher-wage industries of Great Britain and the
United States just as vehemently as our protectionists
protest that our industries would be ruined if exposed
to free competition with the products of the "pauper
labor 7 ' of Europe?

As popularly put, the argument that the country of
high wages needs a protective tariff runs in this way:
"Wages are higher here than elsewhere; therefore, if
the produce of cheaper foreign labor were freely admitted
it would drive the produce of our dearer domestic labor
out of the market." But the conclusion does not follow
from the premise. To make it valid two intermediate
propositions must be assumed: first, that low wages

DO HIGH WAGES NECESSITATE PROTECTIONT 137

mean low cost of production ; and second, that produc-
tion is determined solely by cost or, to put it in another
way, that trade being free, everything will be produced
where it can be produced at least cost. Let us examine
these two propositions separately.

If the country of low wages can undersell the country
of high wages, how is it that though the American farm-
hand receives double the wages of the English agricul-
tural laborer, yet American grain undersells English
grain 1 How is it that while the general level of wages
is higher here than anywhere else in the world we never-
theless do export the products of our high-priced labor
to countries of lower-priced labor f

The protectionist answer is that American grain under-
sells English grain, in spite of the difference of wages,
because of our natural advantages for the production of
grain ; and that the bulk of our exports consists of those
crude productions in which wages are not so important
an element of cost, since they do not embody so much
labor as the more elaborate productions called manufac-
tures.

But the first part of this answer is an admission that
the rate of wages is not the determining element in the
cost of production, and that the country of low wages
does not necessarily produce more cheaply than the
country of high wages; while, as for the distinction
drawn between the cruder and the more elaborate pro-
ductions, it is evident that this is founded on the com-
parison of such things by bulk or weight, whereas the
only measure of embodied labor is value. A pound of
cloth embodies more labor than a pound of cotton, but
this is not true of a dollar's worth. That a small weight
of cloth will exchange for a large weight of cotton, or a
small bulk of watches for a large bulk of wheat, means
simply that equal amounts of labor will produce larger

138 PROTECTION OB FREE TRADE?

weights or bulks of the one thing than of the other ; and
ta the same way the exportation of a certain value of
grain, ore, stone or timber means the exportation of
exactly as much of the produce of labor as would the
exportation of the same value of lace or fancy goods.

Looking further, we see in every direction that it is
not the fact that low-priced labor gives advantage in
production. If this is the fact how was it that the
development of industry in the slave States of the Ameri-
can Union was not more rapid than in the free States?
How is it that Mexico, where peon labor can be had for
from four to six dollars a month, does not undersell the
products of our more highly paid labor f How is it that
China and India and Japan are not " flooding the world "
with the products of their cheap labor f How is it that
England, where labor is better paid than on the Conti-
nent, leads the whole of Europe in commerce and manu-
factures? The truth is, that a low rate of wages does
not mean a low cost of production, but the reverse. The
universal and obvious truth is, that the country where
wages are highest can produce with the greatest econ-
omy, because workmen have there the most intelligence,
the most spirit and the most ability ; because invention
and discovery are there most quickly made and most
readily utilized. The great inventions and discoveries
which so enormously increase the power of human labor
to produce wealth have all been made in countries where
wages are comparatively high.

That low wages mean inefficient labor may be seen
wherever we look. Half a dozen Bengalese carpenters
are needed to do a job that one American carpenter can
do in less time. American residents in China get
servants for almost nothing, but find that so many are
required that servants cost more than in the United
States; yet the Chinese who are largely employed in

DO HIGH WAGES NECESSITATE PROTECTION! 139

domestic service in California, and get wages that they
would not have dreamed of in China, are efficient
workers. Go to High Bridge, and you will see a great
engine attended by a few men, exerting the power of
thousands of horses in pumping up a small river for the
supply of New York city, while on the Nile you may see
Egyptian fellahs raising water by buckets and tread-
wheels. In Mexico, with labor at four or five dollars a
month, silver ore has for centuries been carried to the
surface on the backs of men who climbed rude ladders,
but when silver-mining began in Nevada, where labor
could not be had for less than five or six dollars a day,
steam-power was employed. In Russia, where wages are
very low, grain is still reaped by the sickle and threshed
with the flail or by the hoofs of horses, while in our
Western States, where labor is very high as compared
with the Russian standard, grain is reaped, threshed and
sacked by machinery.

If it were true that equal amounts of labor always
produced equal results, then cheap labor might mean
cheap production. But this is obviously untrue. The
power of human muscle is, indeed, much the same every-
where, and if his wages be sufficient to keep him in good
bodily health the poorly paid laborer can, perhaps, exert
as much physical force as the highly paid laborer. But
the power of human muscles, though necessary to all
production, is not the primary and efficient force in pro-
duction. That force is human intelligence, and human
muscles are merely the agency by which that intelligence
makes connection with and takes hold of external things,
so as to utilize natural forces and mold matter to con-
formity with its desires. A race of intelligent pygmies
with muscles no stronger than those of the grasshopper
could produce far more 'wealth than a race of stupid
giants with muscles as strong as those of the elephant

140 PEOTECTION OB FREE TRADE?

Now, intelligence varies with the standard of comfort,
and the standard of comfort varies with wages. Wher-
ever men are condemned to a poor, hard and precarious
living their mental qualities sink toward the level of the
brute. Wherever easier conditions prevail the qualities
that raise man above the brute and give him power to
master and compel external nature develop and expand.
And so it is that the efficiency of labor is greatest where
laborers get the best living and have the most leisure
that is to say, where wages are highest.

How then, in the face of these obvious facts, can we
account for the prevalence of the belief that the low-
wage country has an advantage in production over the
high-wage country? It cannot be charged to the teach*
ing of protection. This is one of the fallacies which
protectionism avails itself of, rather than one for which
it is responsible. Men do not hold it because they are
protectionists, but become protectionists because they
hold it. And it seems to be as firmly held, and on occa-
sion as energetically preached, by so-called free traders as
by protectionists. Witness the predictions of free-trade
economists that trades-unions, if successful in raising
wages and shortening hours, would destroy England's
ability to sell her goods to other nations, and the similar
objections by so-called free traders to similar movements
on the part of working-men in the United States.

The truth is that the notion that low wages give a
country an advantage in production is a careless infer-
ence from the every-day fact that it is an advantage to
an individual producer to obtain labor at low wages.

It is true that an individual producer gains an advan-
tage when he can force down the wages of his employees
below the ordinary level, or can import laborers who
will work for him for less, and that he may by this
means be enabled to undersell his competitors, while the

DO HIGH WAGES NECESSITATE PROTECTION! 141

employer who continues to pay higher wages than other
employers about him will, before long, be driven out of
business. But it by no means follows that the country
where wages are low can undersell the country where
wages are high. For the efficiency of labor, though it
may somewhat vary with the particular wages paid, is in
greater degree determined by the general standard of
comfort and intelligence, and the prevailing habits and
methods which grow out of them. When a single
employer manages to get labor for less than the rate of
wages prevailing around him, the efficiency of the labor
he gets is still largely fixed by that rate. But a country
where the general rate of wages is low does not have a
similar advantage over other countries, because there the
general efficiency of labor must also be low.

The contention that industry can be more largely
carried on where wages are low than where wages are
high, another form of the same fallacy, may readily be
seen to spring from a confusion of thought. For
instance, in the earlier days of California it was often
said that the lowering of wages would be a great benefit
to the State, as lower wages would enable capitalists to
work deposits of low-grade quartz that it would not pay
to work at the then existing rate of wages. But it is
evident that a mere reduction of wages would not have
resulted in the working of poorer mines, since it could
not have increased the amount of labor or capital avail-
able for the working of mines, and what existed would
still have been devoted to the working of the richer in
preference to the poorer mines, no matter how much
wages were reduced. It might, however, have been said
that the effect would be to increase the profits of capital
and thus bring in more capital. But, to say nothing of
the deterrent effect upon the coming in of labor, a
moment's reflection will show that such a reduction of

142 PROTECTION OB FREE TRADE?

wages would not add to the profits of capital. It would
add to the profits of mine-owners, and mines would
bring higher prices. Eliminating improvements in
methods, or changes in the value of the product, lower
wages and the working of poorer mines come, of course,
together, but this is not because the lower wages cause
the working of poorer mines, but the reverse. As the
richer natural opportunities are taken up and production
is forced to devote itself to natural opportunities that
will yield less to the same exertion, wages fall. There
is, however, no gain to capital ; and under such circum-
stances we do not see interest increase. The gain
accrues to those who have possessed themselves of
natural opportunities, and what we see is that the value
of land increases.

The immediate effect of a general reduction of wages
in any country would be merely to alter the distribution
of wealth. Of the amount produced less would go to
the laborers and more to those who share in the results
of production without contributing to it. Some changes
in exports and imports would probably follow a general
reduction of wages, owing to changes in relative demand.
The working-classes, getting less than before, would
have to reduce their luxuries, and perhaps live on
cheaper food. Other classes, finding their incomes
increased, might use more costly food and demand more
of the costlier luxuries, and larger numbers of them
might go abroad and use up in foreign countries the
produce of exports, by which, of course, imports would
be diminished. But except as to such changes the foreign
commerce of a country would be unaffected. The coun-
try as a whole would have no more to sell and could
buy no more than before. And in a little while the
inevitable effect of the degradation of labor involved in
the reduction of wages would begin to tell in the reduced

DO HIGH WAGES NECESSITATE PROTECTION! 143

power of production, and both exports and imports
would fall off.

So if in any country there were a general increase of
wages, the immediate effect would only be so to alter the
distribution of wealth that more of the aggregate prod-
uct would go to the laboring-classes and less to those
who live on the labor of others. The result would be
that more of the cheaper luxuries would be called for and
less of the more costly luxuries. But productive power
would in no wise be lessened ; there would be no less to
export than before and no less ability to pay for imports.
On the contrary, some of the idle classes would find their
incomes so reduced that they would have to go to work
and thus increase production, while as soon as an
increase in wages began to tell on the habits of the
people and on industrial methods productive power
would increase.

CHAPTER XV.

OP ADVANTAGES AND DISADVANTAGES AS REASONS
FOR PROTECTION.

WE have seen that low wages do not mean low cost
of production, and that a high standard of wages,
instead of putting a country at a disadvantage in produc-
tion, is really an advantage. This disposes of the claim
that protection is rendered necessary by high wages, by
showing the invalidity of the first assumption upon
which it is based. But it is worth while to examine the
second assumption in this claim that production is
determined by cost, so that a country of less advantages
cannot produce if the free competition of a country of
greater advantages be permitted. For while we are
sometimes told that a country needs protection because
of great natural advantages that ought to be developed,
we are at other times told that protection is needed
because of the sparseness of population, the want of
capital or machinery or skill, or because of high taxes or
a high rate of interest,* or other conditions which, it
may be, involve real disadvantage.

* The higher rate of interest in the United States than in Great
Britain has until recently been one of the stock reasons of American
protectionists for demanding a high tariff. We do not hear so much
of this now that the rate in New York is as low as in London, if not
lower, but we hear no less of the need for protection. It is hardly
necessary in this discussion to treat of the nature and law of inter-

ADVANTAGES AND DISADVANTAGES. 146

But without reference to the reality of the alleged
advantage or disadvantage, all these special pleas for
protection are met when it is shown, as it can be shown,
that whatever be its advantages or disadvantages for
production a country can always increase its wealth by
foreign trade.

If we suppose two countries each of which is, for any
reason, at a decided disadvantage in some branch of pro-
duction in which the other has a decided advantage, it is
evident that the free exchange of commodities between
them will be mutually beneficial, by enabling each to
make up for its own disadvantage by availing itself of
the advantage of the other, just as the blind man and
the lame man did in the familiar story. Trade between
them will give to each country a greater amount of all
things than it could otherwise obtain with the same
quantity of labor. Such a case resembles that of two
workmen, each having as to some things skill superior to
the other, and who, by working together, each devoting
himself to that part for which he is the better fitted, can
accomplish more than twice as much as if each worked
separately.

But let us suppose two countries, one of which has
advantages superior to the other for all the productions
of which both are capable. Trade between them being
free, would one country do all the exporting and the
other all the importing ? That, of course, would be pre-
posterous. Would trade, then, be impossible ? Certainly

est, a subject which I have gone over in "Progress and Poverty."
It may, however, be worth while to say that a high rate of interest
where it does not proceed from insecurity, is not to be regarded as
a disadvantage, but rather as evidence of the large returns to the
active factors of production, labor and capital returns which
diminish as rent rises and the'landowner gets a larger share of their
produce for permitting labor and capital to work.

146 PROTECTION OB FREE TRADE T

not. Unless the people of the country of less advantages
transferred themselves bodily to the country of greater
advantages, trade would go on with mutual benefit.
The people of the country of greater advantages would
import from the country of less advantages those prod-
ucts as to which the difference of advantage between
the two countries was least, and would export in return
those products as to which the difference was greatest.
By this exchange both peoples would gain. The people
of the country of poorest advantages would gain by it
some part of the advantages of the other country, and
the people of the country of greatest advantages would
also gain, since, by being saved the necessity of pro-
ducing the things as to which their advantage was least,
they could concentrate their energies upon the produc-
tion of things in which their advantage was greatest.
This case would resemble that of two workmen of differ-
ent degrees of skill in all parts of their trade, or that of
a skilled workman and an unskilled helper. Though the
workman might be able to perform all parts of the work
in less time than the helper, yet there would be some
parts in which the advantage of his superior skill would
be less than in others ; and as by leaving these to the
helper he could devote more time to those parts in which
superior skill would be most effective, there would be,
as in the former case, a mutual gain in their working
together.

Thus it is that neither advantages nor disadvantages
afford any reason for restraining trade.* Trade is

* In point of fact there is no country which as to all branches of
production can be said to have superior advantages. The conditions
which make one part of the habitable globe better fitted for some
productions, unfit it for others, and what is disadvantage for some
kinds of production, is generally advantage for other kinds. Even
the lack of rain which makes some parts of the globe useless to man,

.ADVANTAGES AND DISADVANTAGES. 147

always to the benefit of both parties. If it were not
there would be no disposition to carry it on.

And thus we see again the fallacy of the protectionist
contention that if it takes no more labor to produce a
thing in our country th^n elsewhere, we shall lose
nothing by shutting out the foreign product, even
though we have to pay a higher price for the home prod-
uct. The interchange of the products of labor does not
depend upon differences of absolute cost, but of com-
parative cost. Goods may profitably be sent from places
where they cost more labor to places where they cost less
labor, provided (and this is the only case in which they
ever will be so sent) that a still greater difference in
labor-cost exists as to other things which the first coun-
try desires to obtain. Thus tea, which Horace Greeley
was fond of referring to as a production that might
advantageously be naturalized in the United States by a
heavy duty, could undoubtedly be produced in the United
States at less cost of labor than in China, for in trans-
portation to the seaboard, packing, etc., we could save
upon Chinese methods. But there are other things, such
as the mining of silver, the refining of oil, the weaving
of cloth, the making of clocks and watches, as to which
our advantage over the Chinese is enormously greater
than in the growing of tea. Hence, by producing these
things and exchanging them directly or indirectly for

may, if invention ever succeeds in directly utilizing the power of the
sun's rays, be found to be especially advantageous for certain parts
of production. The advantages and disadvantages that come from
the varying density of population, the special development of cer-
tain forms of industry, etc., are also largely relative., The most
positive of all advantages in production that which most certainly
gives superiority in all branches, is that which arises from that
general intelligence which increases with the increase of the comfort
and leisure of the masses of the people, that is to say, with the
increase of wages.

148 PROTECTION OE FREE TRADE!

Chinese tea, we obtain, in spite of the long carriage,
more tea for the same labor than we could get by grow-
ing our own tea.

Consider how this principle, that the interchange of
commodities is governed by the comparative, not the
absolute, cost of production, applies to the plea that
protective duties are required on account of home taxa-
tion. It is of course true that a special tax placed upon
any branch of production puts it at a disadvantage
unless a like tax is placed upon the importation of
similar productions. But this is not true of such
general taxation as falls on all branches of industry
alike. As such taxation does not alter the comparative
profitableness of industries it does not dimmish the
relative inducement to carry any of them on, and to
protect any particular industry from foreign competition
on account of such general taxation is simply to enable
those engaged in it to throw off their share of a general
burden.

A favorite assumption of American protectionists is,
or rather has been (for we once heard much more of it
than now), that free trade is a good thing for rich coun-
tries but a bad thing for poor countries that it enables
a country of better-developed industries to prevent the
development of industry in other countries, and to make
such countries tributary to itself. But it follows from
the principle which, as we have seen, causes and governs
international exchanges, that for any country to impose
restrictions on its foreign commerce on account of its
own disadvantages in production is to prevent such
amelioration of those disadvantages as foreign trade
would bring. Free trade is voluntary trade. It cannot
go on unless to the advantage of both parties, and, as
between the two, free trade is relatively more advanta-
geous to the poor and undeveloped country than, to the

ADVANTAGES AND DISADVANTAGES. 149

rich and prosperous country. The opening up of trade
between a Robinson Crusoe and the rest of the world
would be to the advantage of both parties. But rela-
tively the advantage would be far greater to Robinson
Crusoe than to the rest of the world.

There is a certain class of American protectionists who
concede that free trade is good in itself, but who say that
we cannot safely adopt it until all other nations have
adopted it, or until all other nations have come up to our
standard of civilization ; or, as it is sometimes phrased,
until the millennium has come and men have ceased to
struggle for their own interests as opposed to the inter-
ests of others. And so British protectionists have now
assumed the name of " Fair Traders." They have ceased
to deny the essential goodness of free trade, but contend
that so long as other countries maintain protective tariffs
Great Britain, in self-defense, should maintain a protec-
tive tariff too, at least against countries that refuse to
admit British productions free.

The fallacy underlying most of these American excuses
for protection is that considered in the previous chapter
the fallacy that the country of low wages can undersell
the country of high wages ; but there is also mixed with
this the notion to which the British fair traders appeal
the notion that the abolition of duties by any country is
to the advantage, not of the people of that country, but
of the people of the other countries that are thus given
free access to its markets. " Is not the fact that British
manufacturers desire the abolition of our protective tariff
a proof that we ought to continue it?" ask American
protectionists. "Is it not a suicidal policy to give for-
eigners free access to our markets while they refuse us
access to theirs ? n cry British fair traders.

All these notions are. forms of the delusion that to
export is more profitable than to import, but so wide-

150 PEOTECTION OR FREE TBADET

spread and influential are they that it may be well to
devote a few words to them. The direct effect of a tariff
is to restrain the people of the country that imposes
it. It curtails the freedom of foreigners to trade only
through its operation in curtailing the freedom of
citizens to trade. So far as foreigners are concerned it
only indirectly affects their freedom to trade with that
particular country, while to citizens of that country it is
a direct curtailment of the freedom to trade with all the
world. Since trade involves mutual benefit, it is true
that any restriction that prevents one party from trading
must operate in some degree to the injury of another
party. But the indirect injury which a protective tariff
inflicts upon other countries is diffused and slight, as
compared with the injury it inflicts directly upon the
nation that imposes it.

To illustrate : The tariff which we have so long main-
tained upon iron to prevent our people from exchanging
their products for British iron has unquestionably
lessened our trade with Great Britain. But the effect
upon the United States has been very much more injuri-
ous than the effect upon Great Britain. While it has
lessened our trade absolutely, it has lessened the trade of
Great Britain only with us. What Great Britain has
lost in this curtailment of her trade with us she has
largely made up in the consequent extension of her trade
elsewhere. For the effect of duties on iron and iron ore,
and of the system of which they are part, has been so to
increase the cost of American productions as to give to
Great Britain the greater part of the carrying trade of
the world, for which we were her principal competitor,
and to hand over to her the trade of South America and
of other countries, of which, but for this, we should have
had the largest share.

ADVANTAGES AND DISADVANTAGES. 151

And in the same way, for any nation to restrict the
freedom of its own citizens to trade, because other
nations so restrict the freedom of their citizens, is a
policy of the " biting off one's nose to spite one's face *
order. Other nations may injure us by the imposition of
taxes which tend to impoverish their own citizens, for as
denizens of the world it is to our real interest that all
other denizens of the world should be prosperous. But
no other nation can thus injure us so much as we shall
injure ourselves if we impose similar taxes upon our own
citizens by way of retaliation.

Suppose that a farmer who has an improved variety
of potatoes learns that a neighbor has wheat of such
superior kind that it will yield many more bushels to the
acre than that he has been sowing. He might naturally
go to his neighbor and offer to exchange seed-potatoes
for seed-wheat. But if the neighbor while willing to sell
the wheat should refuse to buy the potatoes, would not
our farmer be a fool to declare, " Since you will not buy
my superior potatoes I will not buy your superior
wheat!" Would it not be very stupid retaliation for
him to go on planting poorer seed and getting poorer
crops ?

Or, suppose, isolated from the rest of mankind, half a
dozen men so situated and so engaged that mutual con-
venience constantly prompts them to exchange produc-
tions with one another. Suppose five of these six to be
under the dominion of some curious superstition which
leads them when they receive anything in exchange to
burn one-half of it up before carrying home the other
half. This would indirectly be to the injury of the sixth
man, because by thus lessening their own wealth his five
neighbors would lessen their ability to exchange with
him. But, would he better himself if he were to say:

152 PROTECTION OR FREE TRADE T

"Since these fools will insist upon burning half of all
they get in exchange I must, in self-defense, follow their
example and burn half of all I get"?

The constitution and scheme of things in this world in
which we find ourselves for a few years is such that no
one can do either good or evil for himself alone. No
one can release himself from the influence of his sur-
roundings, and say, " What others do is nothing to me ; n
nor yet can any one say, "What I do is nothing to
others." Nevertheless it is in the tendency of things
that he who does good most profits by it, and he who
does evil injures, most of all, himself. And those who
say that a nation should adopt a policy essentially bad
because other nations have embraced it are as unwise as
those who say, Lie, because others are false; Be idle,
because others are lazy; Refuse knowledge, because
others are ignorant.

CHAPTER XVI.

THE DEVELOPMENT OF MANUFACTURES.

Tj^NGLISH protectionists, during the present century
i:J at least, struggled for the protection of agriculture,
and the repeal of the corn-laws in 1846 was their Water-
loo. On the Continent, also, it is largely agriculture that
is held to need protection, and special efforts have been
made to protect the German hog, even to the extent of
shutting out its American competitor. But in the
United eStates the favorite plea for protection has been
that it is necessary to the establishment of manufac-
tures ; and the prevalent American idea of protection is
that it is a scheme for fostering manufactures.

As a matter of fact, American protection has not been
confined to manufactures, nor has there been any hesi-
tation in imposing duties which by raising the cost of
materials are the very reverse of encouraging to manu-
factures. In the scramble which the protective system
has induced, every interest capable of being protected
and powerful enough to compel consideration in Congres-
sional log-rolling has secured a greater or less share of
protection a share not based upon any standard of
needs or merits, but upon the number of votes it could
command. Thus wool, the production of which is one
of the most primitive of industries, preceding even the
tilling of the soil, has been protected by high duties,
although certain grades of foreign wool are necessary to

153

154 PROTECTION OB FREE TRADE?

American woolen-manufacturers, who have by these
duties been put at a disadvantage in competing with
foreign manufacturers. Thus iron ore has been protected
despite the fact that American steel-makers need foreign
ore to mix with American ore, and are obliged to import
it even under the high duty. Thus copper ore has been
protected, to the disadvantage of American smelters, as
well as of all the many branches of manufacture into
which copper enters. Thus salt has been protected,
though it is an article of prime necessity, used in large
quantities in such important industries as the curing of
meats and fish, and entering into many branches of
manufacture. Thus lumber has been protected in spite
of its importance in manufacturing as well as of the
protests of all who have inquired into the consequences
of the rapid clearing of our natural woodlands. Thus
coal has been protected, though to many branches of
manufacturing cheap fuel is of first importance. And so
on, through the list.

Protection of this kind is direct discouragement of
manufactures. Nor yet is it encouragement of any
industry, since its effect is, not to make production of
any kind more profitable, but to raise the price of lands
or mines from which these crude products are obtained.

Yet in spite of all this discouragement of manufac-
tures, of which the instances I have given are but
samples, protection is still advocated as necessary to
manufactures, and the growth of American manufactures
is claimed as its result.

So long and so loudly has this claim been made that
to-day many of our people believe, what protectionist
writers and speakers constantly assume, that but for
protection there would not now be a manufacture of any
importance carried on in the United States, and that
were protection abolished the sole industry that this

THE DEVELOPMENT OF MANUFACTURES. 156

great country could carry on would be the raising of
agricultural products for exportation to Europe.

That so many believe this is a striking instance of our
readiness to accept anything that is persistently dinned
into our ears. For that manufactures grow up without
protection, and that the effect of our protective tariff is
to stunt and injure them, can be conclusively shown
from general principles and from common facts.

But first, let me call attention to a confusion of
thought which gives plausibility to the notion that manu-
factures should be "encouraged." Manufactures grow
up as population increases and capital accumulates, and,
in the natural order of industry, are best developed in
countries of dense population and accumulated wealth.
Seeing this connection, it is easy to mistake for cause
what is really effect, and to imagine that manufacturing
brings population and wealth. Here, in substance, is
the argument which has been addressed to the people of
the United States from the time when we became a
nation to the present day:

Manufacturing countries are always rich countries. Coun-
tries that produce only raw materials are always poor. There-
fore, if we would be rich we must have manufactures, and in
order to get manufactures we must encourage them.

To many this argument seems plausible, especially as
the taxes for the " encouragement " of the protected
industries are levied in such a way that their payment is
not realized. But I could make as good an argument to
the people of the little town of Jamaica, near which I am
now living, in support of a subsidy to a theater. I could
say to them :

"All large cities have theaters, and the more theaters
it has, the larger the city. Look at New York ! New
York has more theaters than any other city in America,
is consequently the greatest city in America. Phila-

156 PROTECTION OB PBEE TRADE?

delphia ranks next to New York in the number and size
of its theaters, and therefore comes next to New York in
population and wealth. So, throughout the country,
wherever you find large, well-appointed theaters, you will
find large and prosperous towns, while where there are
no theaters the towns are small. Is it any wonder that
Jamaica is so small and grows so slowly when it has no
theaters at all? People do not like to settle in a place
where they cannot occasionally go to the theater. If
you want Jamaica to thrive you must take steps to build
a fine theater, which will attract a large population.
Look at Brooklyn ! Brooklyn was only a small riverside
village before its people had the enterprise to start a
theater, and see now, since they began to build theaters,
how large a city Brooklyn has become."

Modeling my argument on that addressed to American
voters by the Presidential candidate of the Republican
party in 1884, I might then drop into " statistics " and
point to the fact that when theatrical representations
first began in this country its population did not amount
to a million ; that it was totally destitute of railroads and
without a single mile of telegraph-wire. Such has been
our progress since theaters were introduced that the
census of 1880 showed that we had 50,155,783 people,
97,907 miles of railroad and 291,212^ miles of tele-
graph-wires. Or I might go into greater detail, as some
protectionist "statisticians" are accustomed to do. I
might take the date of the building of each of the New
York theaters, give the population and wealth of the city
at that time, and then, by presenting the statistics of
population and wealth a few years later, show that the
building of each theater had been followed by a marked
increase in population and wealth. I might point out
that San Francisco had not a theater until the Ameri-
cans came there, and was consequently but a straggling

THE DEVELOPMENT OF MANUFACTURES. 157

village j that the new-comers immediately set up theaters
and maintained them more generously than any other
similar population in the world, and that the conse-
quence was the marvelous growth of San Francisco. I
might show that Chicago and Denver and Kansas City,
all remarkably good theater towns, have also been
remarkable for their rapid growth, and, as in the case of
New York, prove statistically that the building of each
theater these cities contain has been followed by an
increase of population and wealth.

Then, stretching out after protectionist fashion into
the historical argument, I might refer to the fact that
Nineveh and Babylon had no theaters that we know of,
and so went to utter ruin ; dilate upon the fondness of
the ancient Greeks for theatrical entertainments con-
ducted at public expense, and their consequent greatness
in arts and arms ; point out how the Romans went even
further than the Greeks in their encouragement of the
theater, and built at public cost the largest theater in the
world, and how Rome became the mistress of the nations.
And, to embellish and give point to the argument, I
might perhaps drop into poetry, recalling Byron's lines :

When falls the Colosseum, Rome shall fall ;
And when Borne falls the world !

Recovering from this, I might cite the fact that in
every province they conquered the Romans established
theaters, as explaining the remarkable facility with
which they extended their civilization and made the
conquered provinces integral parts of their great empire ;
point out that the decline of these theaters and the decay
of Roman power and civilization went on together ; and
that the extinction of the theater brought on the night
of the Dark Ages. Dwelling then a moment upon the
rudeness and ignorance of that time when there w6re no

158 PROTECTION OR FREE TRADE?

theaters, I might triumphantly point to the beginning of
modern civilization as contemporaneous with the revival
of theatrical entertainments in miracle-plays and court
masks. And showing how these plays and masks were
always supported by monasteries, municipalities or princes,
and how places where they began became sites of great
cities, I could laud the wisdom of "encouraging infant
theatricals." Then, in the fact that English actors,
until recently, styled themselves her Majesty's serv*
ants and that the Lord Chamberlain still has author-
ity over the English boards, and must license plays
before they can be acted, I could trace to a national
system of subsidizing infant theatricals the foundation
of England's greatness. Coming back to our own times,
I could call attention to the fact that Paris, where
theaters are still subsidized and actors still draw their
salaries from the public treasury, is the world's metrop
olis of fashion and art, steadily growing in population
and wealth, though other parts of the same country
which do not enjoy subsidized theaters are either at a
standstill or declining. And finally I could point to the
astuteness of the Mormon leaders, who early in the settle-
ment of Salt Lake built a spacious theater, and whose
little village in the sage-brush, then hardly as large as
Jamaica, has since the building of this theater grown to
be a populous and beautiful city, and indignantly ask
whether the virtuous people of Jamaica should allow
themselves to be outdone by wicked polygamists.

If such an argument would not induce the Jamaicans to
tax themselves to " encourage n a theater, would it not at
least be as logical as arguments that have induced the
American people to tax themselves to encourage manu-
factures ?

The truth is that manufactures, like theaters, are the
result, not the cause, of the growth of population and
wealth.

THE DEVELOPMENT OP MANUFACTURES. 159

If we take a watch, a book, a steam-engine, a piece of
dry-goods, or the product of any of the industries which
we class as manufactures, and trace the steps by which
the material of which it is composed has been brought
from the condition in which it is afforded by nature into
finished form, we will see that to the carrying on of any
manufacturing industry many other industries are neces-
sary. That an industry of this kind shall be able to
avail itself freely of the products of other industries is a
prime condition of its successful prosecution. Hardly
less important is the existence of related industries,
which aid in economizing material and utilizing waste,
or make easier the procurement of supplies or services,
or the sale and distribution of products. This is the
reason why the more elaborate industries tend within
certain limits to localization, so that we find a particular
district, without any assignable reason of soil, climate,
material productions, or character of the people, become
noted for a particular manufacture, while different places
within that district become noted for different branches.
Thus, in those parts of Massachusetts where the manu-
facture of boots and shoes is largely carried on, distinc-
tions such as those between pegged and sewed goods,
men's and women's wear, coarse and fine, will be found
to characterize the industry of different towns. And in
any considerable city we may see the disposition of
various industries, with their related industries, to
cluster together.

But with this tendency to localization there is also a
tendency which causes industries to arise in their order
wherever population increases. This tendency is due
not only to the difficulty and cost of transportation,
but to differences in taste and to the individuality of
demands. For instance, it will be much more conve-
nient and satisfactory to me, if I wish to have a boat built,
to have it built where I can talk with the builder and

160 PEOTECTION OB FREE TRADE!

watch its construction ; or to have a coat made where I
can try it on; or to have a book printed where I can
readily read the proofs and consult with the printer.
Further than this, that relation of industries which
makes the existence of certain industries conduce to the
economy with which others can be carried on, not merely
causes the growth of one industry to prepare the way for
others, but to promote their establishment.

Thus the development of industry is of the nature of
an evolution, which goes on with the increase of population
and the progress of society, the simpler industries coming
first and forming a basis for the more elaborate ones.

The reason that newly settled countries do not manu-
facture is that they can get manufactured goods cheaper
that is to say, with less expenditure of labor than by
manufacturing them. Just as the farmer, though he
may have ash and hickory growing on his place, finds it
cheaper to buy a wagon than to make one, or to take his
wagon to the wheelwright's when it wants repairing,
rather than attempt the job himself, so in a new and
sparsely settled country it may take less labor to obtain
goods from long distances than to manufacture them,
even when every natural condition for their manufac-
ture exists. The conditions for profitably carrying on
any manufacturing industry are not merely natural con-
ditions. Even more important than climate, soil and
mineral deposits are the existence of subsidiary industries
and of a large demand. Manufacturing involves the
production of large quantities of the same thing. The
development of skill, the use of machinery and of
improved processes, become possible only as large quan-
tities of the same product are required. If the small
quantities of all the various things needed must be pro-
duced for itself by each small community, they can be
produced only by rude and wasteful methods. But if

THE DEVELOPMENT OF MANUFACTURES. 161

trade permits these things to be produced in large quan-
tities the same labor becomes much more effective, and
all the various wants can be much better supplied.

The rude methods of savages are due less to ignorance
than to isolation. A gun and ammunition will enable a
man to kill more game than a bow and arrows, but a
man who had to make his own weapons from the mate-
rials furnished by nature, could hardly make himself a
gun in a lifetime, even if he understood gun-making.
Unless there is a large number of men to be supplied
with guns and ammunition, and the materials of which
these are made can be produced with the economy that
conies with the production of large quantities, the most
effective weapons, taking into account the labor of pro-
ducing them, are bows and arrows, not firearms. With
a steel ax a tree may be felled with much less labor than
with a stone ax. But a man who must make his own
ax would be able to fell many trees with a stone ax in
the time he would spend trying to make a steel ax from
the ore. We smile at the savages who for a sheath-knife
or copper kettle gladly give many rich furs. Such arti-
cles are with us of little value, because being made in
large quantities the expenditure of labor required for
each is very small, but if made in small quantities, as the
savage would have to make them, the expenditure of
labor would far exceed that needed to obtain the furs.
Even if they had the fullest knowledge of the tools and
methods of civilized industry, men isolated as savages
are isolated, would be forced to resort to the rude tools
and methods of savages. The great advantage which
civilized men have over savages in settling amoog them,
is in the possession of tools and weapons made in that
state of society in which alone it is possible to manu-
facture them, and that by keeping up communication
with the denser populations they have left behind them,

162 PROTECTION OB FREE TRADE!

the settlers are able by means of trade to avail them,
selves of the manufacturing advantages of a more fully
developed society. If the first American colonists had
been unable to import from Europe the goods they
required, and thus to avail themselves of the fuller
development of European industry, they must soon have
been reduced to savage tools and weapons. And this
would have happened to all new settlements in the west-
ward march of our people had they been cut off from
trade with larger populations.

In new countries the industries that yield the largest
comparative returns are the primary or extractive indus-
tries which obtain food and the raw materials of manu-
facture from nature. The reason of this is that in these
primary industries there are not required such costly
tools and appliances, nor the cooperation of so many
other industries, nor yet is production in large quantities
so important. The people of new countries can therefore
get the largest return for their labor by applying it to
the primary or extractive industries, and exchanging
their products for those of the more elaborate industries
that can best be carried on where population is denser.

As population increases, the conditions under which
the secondary or any more elaborate industries can be
carried on gradually arise, and such industries will be
established those for which natural conditions are pecu-
liarly favorable, and those whose products are in most
general demand and will least bear transportation, com-
ing first. Thus in a country having fine forests, manu-
factures of wood will arise before manufactures for
which there is no special advantage. The making of
bricks will precede the making of china, the manufacture
of plowshares that of cutlery, window-glass will be made
before telescope lenses, and the coarser grades of cloth
before the finer.

THE DEVELOPMENT OF MANUFACTURES. 163

But while we may describe in a general way the condi-
tions which determine the natural order of industry, yet
so many are these conditions and so complex are their
actions and reactions upon one another that no one can
predict with any exactness what in any given community
this natural order of development will be, or say when it
becomes more profitable to manufacture a thing than to
import it. Legislative interference, therefore, is sure to
prove hurtful, and such questions should be left to the
unfettered play of individual enterprise, which is to the
community what the unconscious vital activities are to
the man. If the time has come for the establishment of
an industry for which proper natural conditions exist,
restrictions upon importation in order to promote its
establishment are needless. If the time has not come,
such restrictions can only divert labor and capital from
industries in which the return is greater, to others in
which it must be less, and thus reduce the aggregate
production of wealth. Just as it is evident that to pre-
vent the people of a new colony from importing from
countries of fuller industrial development would deprive
them of many things they could not possibly make for
themselves, so it is evident that to restrict importations
must retard the symmetrical development of domestic
industries. It may be that protection applied to one or
to a few industries may sometimes hasten their develop-
ment at the expense of the general industrial growth;
but when protection is indiscriminately given to every
industry capable of protection, as it is in the United
States, and as is the inevitable tendency wherever pro-
tection is begun, the result must be to check not merely
the general development of industry, but even the de-
velopment of the very industries for whose benefit
the system of protection is most advocated, by making
more costly the products which they must use and

164 PROTECTION OB FREE TRADE!

repressing the correlative industries with which they
interlace.

To assume, as protectionists do, that economy must
necessarily result from bringing producer and consumer
together in point of space,* is to assume that things can
be produced as well in one place as in another, and that
difficulties in exchange are to be measured solely by
distance. The truth is, that commodities can often be
produced in one place with so much greater facility than
in another that it involves a less expenditure of labor to
bring them long distances than to produce them on the
spot, while two points a hundred miles apart may be
commercially nearer each other than two points ten
miles apart. To bring the producer to the consumer in
point of distance, is, if it increases the cost of production,
not economy but waste.

But this is not to deny that trade as it is carried on
to-day does involve much unnecessary transportation,
and that producer and consumer are in many cases need-
lessly separated. Protectionists are right when they
point to the wholesale exportation of the elements of
fertility of our soil, in the great stream of breadstuffs
and meats which pours across the Atlantic, as reckless
profligacy, and fair traders are right when they deplore
the waste involved in English importations of food while
English fields are going out of cultivation. Both are
right in saying that one country ought not to be made a
" draw farm " for another, and that a true economy of the
powers of nature would bring factory and field closer
together. But they are wrong in attributing these evils
to the freedom of trade, or in supposing that the remedy

* Protectionist arguments frequently involve the additional
assumption that the "home producer" and "home consumer" are
necessarily close together in point of space, whereas, as in the
United States, they may be thousands of miles apart.

THE DEVELOPMENT OF MANUFACTURES. 165

lies in protection. That tariffs are powerless to remedy
these evils may be seen in the fact that this exhausting
exportation goes on in spite of our high protective tariff,
and that internal trade exhibits the same features.
Everywhere that modern civilization extends, and with
greatest rapidity where its influences are most strongly
felt, population and wealth are concentrating in huge
towns and an exhausting commerce flows from country
to city. But this ominous tendency is not natural, and
does not arise from too much freedom ; it is unnatural,
and arises from restrictions. It may be clearly traced to
monopolies, of which the monopoly of material opportu-
nities is the first and most important. In a word, the
Roman system of landownership, which in our modern
civilization has displaced that of our Celtic and Teutonic
ancestors, is producing the same effect that it did in the
Roman world the engorgement of the centers and the
impoverishment of the extremities. While London and
New York grow faster than Rome ever did, English
fields are passing out of cultivation as did the fields of
Latium, and in Iowa and Dakota goes on the exhausting
culture that impoverished the provinces of Africa. The
same disease which rotted the old civilization is exhibit-
ing its symptoms in the new. That disease cannot be
cured by protective tariffs.

CHAPTER XVH.

PROTECTION AND PRODUCERS.

FT1HE primary purpose of protection is to encourage
A producers* that is to say, to increase the profits of
capital engaged in certain branches of industry.

The protective theory is that the increase a protective
duty causes in the price at which an imported commodity
can be sold within the country, protects the home pro-
ducer (i.e., the man on whose account commodities are
produced for sale) from foreign competition, so as to
encourage him by larger profits than he could otherwise
get to engage in or increase production. All the bene-
ficial effects claimed for protection depend upon its effect
in thus encouraging the employing producer, just as all
the effects produced by the motion of an engine upon the
complicated machinery of a factory are dependent upon
its effect in turning the main driving-wheel. The main
driving-wheel (so to speak) of the protective theory is that
protection increases the profits of the protected producer.
But when, assuming this, the opponents of protection
represent the whole class of protected producers as grow-

* FOP want of a better term I have here used the word "pro-
ducers " in that limited sense in which it is applied to those who
control capital and employ labor engaged in production. The
industries protected by our tariff are (with perhaps some nominal
exceptions) of the kind carried on in this way.

166

PROTECTION AND PRODUCERS. 167

ing rich at the expense of their fellow-citizens, they are
contradicted by obvious facts. Business men well know
that in our long-protected industries the margin of profit
is as small and the chances of failure as great as in any
others if, in fact, those protected industries are not
harder to win success in by reason of the more trying
fluctuations to which they are subject.

The reason why protection in most cases thus fails to
encourage is not difficult to see.

The cost of any protective duty to the people at large is
(1), the tax collected upon imported goods, plus the profits
upon the tax, plus the expense and profits of smuggling
in all its forms; plus the expense of sometimes trying
smugglers of the coarser sort, and occasionally sending
a poor and friendless one to the penitentiary ; plus bribes
and moieties received by government officers; and (2),
the additional prices that must be paid for the products
of the protected home industry.

It is from this second part alone that the protected
industry can get its encouragement. But only a part of
this part of what the people at large pay is real encour-
agement. - In the first place, it is true of protective
duties, as it is true of direct subsidies, that they cannot
be had for nothing. Just as the Pacific Mail Steamship
Company and the various land- and bond-grant railways
had to expend large sums to secure representation at
Washington, and had to divide handsomely with the
Washington lobby, so the cost of securing Congres-
sional "recognition" for an infant industry, or fighting
off threatened reductions in its "encouragement," and
looking after every new tariff bill, is a considerable item.
But still more important is the absolute loss in carrying
on industries so unprofitable in themselves that they can
be maintained only by subsidies. And to this loss must
be added the waste that seems inseparable from govern-

168 PROTECTION OR FREE TRADE?

mental fosterage, for just in proportion as industries are
sheltered from competition are they slow to avail them-
selves of improvements in machinery and methods.*
Out of the encouragement which the tariff beneficiaries
receive in higher prices, much must thus be consumed, so
that the net encouragement is only a small fraction of
what consumers pay. Taking encouraged producers and
taxed consumers together there is an enormous loss.
Hence in all cases in which duties are imposed for the
benefit of any particular industry the discouragement to
industry in general must be greater than the encourage-
ment of the particular industry. So long, however, as
the one is spread over a large surface and the other over
a small surface, the encouragement is more marked than
the discouragement, and the disadvantage imposed on
all industry does not much affect the few subsidized
industries.

But to introduce a tariff bill into a congress or parlia-
ment is like throwing a banana into a cage of monkeys.
No sooner is it proposed to protect one industry than
all the industries that are capable of protection begin to
screech and scramble for it. They are, in fact, forced to
do so, for to be left out of the encouraged ring is neces-
sarily to be discouraged. The result is, as we see in the

* This disposition is, of course, largely augmented by the greater
cost of machinery under our protective tariff, which not only
increases the capital required to begin, but makes the constant
discarding of old machinery and purchase of new, required to keep
up with the march of invention, a much more serious matter. Cases
have occurred in which British manufacturers, compelled by com-
petition to adopt the latest improvements, have actually sold their
discarded machinery to be shipped to the United States and used by
protected Americans. It was his coming across a case of this kind
that led David A. Wells, when he visited Europe as Special Com-
missioner of Revenue, to begin to question the usefulness of our
tariff in promoting American industry.

PROTECTION AND PRODUCERS. 160

United States, that they all get protected, some more
and some less, according to the money they can spend
and the political influence they can exert. Now every
tax that raises prices for the encouragement of one
industry must operate to discourage all other industries
into which the products of that industry enter. Thus a
duty that raises the price of lumber necessarily discour-
ages the industries which make use of lumber, from those
connected with the building of houses and ships to those
engaged in the making of matches and wooden tooth-
picks; a duty that raises the price of iron discourages
the innumerable industries into which iron enters; a
duty that raises the price of salt discourages the dairy-
man and the fisherman; a duty that raises the price of
sugar discourages the fruit-preserver, the maker of
cyrups and cordials, and so on. Thus it is evident that
every additional industry protected lessens the encour-
agement of those already protected. And since the net
encouragement that tariff beneficiaries can receive as a
whole is very much less than the aggregate addition to
prices required to secure it, it is evident that the point at
which prptection will cease to give any advantage to the
protected must be much short of that at which every one
is protected. To illustrate : Say that the total number
of industries is one hundred, of which one-half are
capable of protection. Let us say that of what the pro-
tection costs, one-fourth is realized by the protected
industries. Then (presuming equality), as soon as twenty-
five industries obtain protection, the protection can be of
no benefit even to them, while, of course, involving a
heavy discouragement to all the rest.

I use this illustration merely to show that there is a
point at which protection must cease to benefit even the
industries it strives to encourage, not that I think it
possible to give numerical exactness to such matters.

170 PROTECTION OB FREE TRADE?

But that there is such a point is certain, and that in the
United States it has been reached and passed is also cer-
tain. That is to say, not only is our protective tariff a
dead-weight upon industry generally, but it is a dead-
weight upon the very industries it is intended to stimu-
late.

If there are producers who permanently profit by pro-
tective duties, it is only because they are in some other
way protected from domestic competition, and hence the
profit which comes to them by reason of the duties does not
come to them as producers but as monopolists. That is
to say, the only cases in which protection can more than
temporarily benefit any class of producers are cases in which
it cannot stimulate industry. For that neither duties nor
subsidies can give any permanent advantage in any busi-
ness open to home competition results from the tendency
of profits to a common level. The risk to which pro-
tected industries are exposed from changes in the tariff
may at times keep profits in them somewhat above the
ordinary rate ; but this represents not advantage, but the
necessity for increased insurance, and though it may
constitute a tax upon consumers does not operate to
extend the industry. This element of insurance elimi-
nated, profits in protected industries can be kept above
those of unprotected industries only by some sort of
monopoly which shields them from home competition as
the tariff does from foreign competition. The first effect
of a protective duty is to increase profits in the protected
industry. But unless that industry be in some way
protected from the influx of competitors which such
increased profits must attract, this influx must soon
bring these profits to the general level. A monopoly,
more or less complete, which may thus enable certain
producers to retain for themselves the increased profits
which it is the first effect of a protective duty to give,

PBOTECTION AND PRODUCERS. 171

may arise from the possession of advantages of different
kinds.

It may arise, in the first place, from the possession of
some peculiar natural advantage. For instance, the only
chrome-mines yet discovered in the United States,
belonging to a single family, that family have been
much encouraged by the higher prices which the protec-
tive duty on chrome has enabled them to charge home
consumers. In the same way, until the discovery of
new and rich copper deposits in Arizona and Montana
the owners of the Lake Superior copper-mines were
enabled to make enormous dividends by the protective
duty on copper, which, so long as home competition was
impossible, shut out the only competition that could
reduce their profits, and enabled them to get three or
four cents more per pound for the copper they sold in
the United States than for the copper they shipped to
Europe.

Or a similar monopoly may be obtained by the posses-
sion of exclusive privileges given by the patent laws.
For instance, the combination based on patents for
making steel have, since home competition with them
was thus shut out, been enabled, by the enormous duty
on imported steel, to add most encouragingly to their
dividends, and the owners of the patented process used
in making paper from wood have been similarly encour-
aged by the duty on wood-pulp.

Or again, a similar monopoly may be secured by the
concentration of a business requiring large capital and
special knowledge, or by the combination of producers
in a "ring" or "pool" so as to limit home production
and crush home competition. For instance, the protec-
tive duty on quinine, until its abolition in 1879, resulted
to the sole benefit of three houses, while a combination of
auarrY-owners the Producers' Marble Companyhave

172 PROTECTION OB FREE TRADE?

succeeded in preventing any home competition in the pro*
duction of marble, and are thus enabled to retain to
themselves the higher profits which the protective duty
on foreign marble makes possible, and largely to concen-
trate in their own hands the business of working up
marble.

But the higher profits thus obtained in no way encour
age the extension of such industries. On the contrary,
they result from the very conditions natural or artificial
which prevent the extension of these industries. They
are, in fact, not the profits of capital engaged in industry,
but the profits of ownership of natural opportunities, of
patent rights, or of organization or combination, and
they increase the value of ownership in these opportu-
nities, rights and monopolistic combinations, not the
returns of capital engaged in production. Though they
may go to individuals or companies who are producers,
they do not go to them as producers ; though they may
increase the income of persons who are capitalists, they
do not go to them by virtue of their employment of capi-
tal, but by virtue of their ownership of special privileges.

Of the monopolies which thus get the benefit of profits
erroneously supposed to go to producers, the most impor-
tant are those arising from the private ownership of
land. That what goes to the landowner in no wise
benefits the producer we may readily see.

The two primary factors of production, without which
nothing whatever can be produced, are land and labor.
To these essential factors is added, when production
passes beyond primitive forms, a third factor, capital
which consists of the product of land and labor (wealth)
used for the purpose of facilitating the production of
more wealth. Thus to production as it goes on in civi-
lized societies the three factors are land, labor and
capital, and since land is in modern civilization made a

PROTECTION AND PRODUCERS. 173

subject of private ownership, the proceeds of production
are divided between the landowner, the labor-owner,
and the capital-owner.

But between these factors of production there exists
an essential difference. Land is the purely passive
factor; labor and capital are the active factors the
factors by whose application and according to whose
application wealth is brought forth. Therefore, it is
only that part of the produce which goes to labor and
capital that constitutes the reward of producers and
stimulates production. The landowner is in no sense a
producer he adds nothing whatever to the sum of pro-
ductive forces, and that portion of the proceeds of
production which he receives for the use of natural
opportunities no more rewards and stimulates pro-
duction than does that portion of their crops which
superstitious savages might burn up before an idol in
thank-offering for the sunlight that had ripened them.
There can be no labor until there is a man ; there can be
no capital until man has worked and saved; but land
was here before man came. To the production of com-
modities the laborer furnishes human exertion ; the capi-
talist furnishes the results of human exertion embodied
in forms that may be used to aid further exertion ; but
the landowner furnishes what? The superficies of the
earth? the latent powers of the soil? the ores beneath it?
the rain ? the sunshine ? gravitation ? the chemical affini-
ties? What does the landowner furnish that involves
any contribution from him to the exertion required in
production ? The answer must be, nothing ! And hence
it is that what goes to the landowner out of the results
of production is not the reward of producers and does
not stimulate production, but is merely a toll which
producers are compelled to pay to one whom our laws
permit to treat as his own what Nature furnishes.

174 PROTECTION OB FREE TRADE!

Now, keeping these principles in mind, let us torn to
the effects of protection. Let us suppose that England
were to do as the English agriculturist landlords are
very anxious to have her do go back to the protective
policy and impose a high duty on grain. This would
much increase the price of grain in England, and its first
effect would be, while seriously injuring other industries,
to give much larger profits to English farmers. This
increase of profits would cause a rush into the business
of farming, and the increased competition for the use of
agricultural land would raise agricultural rents, so that
the result would be, when industry had readjusted itself,
that though the people of England would have to pay
more for grain, the profits of grain-producing would not
be larger than profits in any other occupation. The only
class that would derive any benefit from the increased
price that the people of England would have to pay for
their food would be the agricultural landowners, who
are not producers at all.

Protection cannot add to the value of the land of a
country as a whole, any more than it can stimulate
industry as a whole ; on the contrary, its tendency is to
check the general increase of land values by checking
the production of wealth ; but by stimulating a particular
form of industry it may increase the value of a particular
kind of land. And it is instructive to observe this, for it
largely explains the motive in urging protection, and
where its benefits go.

For instance, the duty on lumber has not been asked
for and lobbied for by the producers of lumberthat is
to say, the men engaged in cutting down and sawing up
trees, and who derive their profits solely from that
source nor has it added to their profits. The parties
who have really lobbied and logrolled for the imposition

PROTECTION AND PRODUCERS. 176

and maintenance of the lumber duty are the owners of
timber lands, and its effect has been to increase the price
of "stumpage," the royalty which the producer of lumber
must pay to the owner of timber land for the privilege of
cutting down trees. A certain class of forestallers have
made a business of getting possession of timber lands by
all the various "land-grabbing" devices as soon as the
progress of population promised to make them available.
Constituting a compact and therefore powerful interest
(three parties in Detroit, for instance, are said to own -ffo
of the timber lands in the great timber State of Michi-
gan), they have been able to secure a duty on lumber,
which, nominally imposed for the encouragement of the
lumber producer, has really encouraged only the timber-
land forestaller, who, instead of being a producer at all,
is merely a blackmailer of production.*

So it is with many other duties. The effect of the
sugar duty, for instance, is to increase the value of sugar
lands in Louisiana, and our treaty with the Hawaiian
Islands, by which Hawaiian sugar is admitted free of
this duty, being equivalent (since the production of
Hawaiian stigar is not sufficient to supply the United
States) to the payment of a heavy bounty to Hawaiian
sugar-growers, has enormously increased the value of
sugar lands in the Hawaiian Islands. So with the duty
on copper and copper ore, which for a long time enabled
American copper companies to keep up the price of
copper in the United States while they were shipping

* When, after the great fire in Chicago, a bill was introduced in
Congress permitting the importation free of duty of materials
intended for use in the rebuilding of that city, the Michigan timber-
land barons went to Washington in a special car and induced the
committee to omit lumber from the bill.

176 PROTECTION OR FREE TRADE?

copper to Europe and selling it there at a considerably
lower price.* The benefit of these duties went to com-
panies engaged in producing copper, but it went to them
not as producers of copper but as owners of copper-
mines. If, as is largely the case in coal- and iron-mining,
the work had been carried on by operators who paid a roy-
alty to the mine-owners, the enormous dividends would
have gone to the mine-owners and not to the operators.

Horace Greeley used to think that he conclusively dis-
proved the assertion that the duties on iron were enriching
a few at the expense of the many, when he declared that
our laws gave to no one any special privilege of making
iron, and asked why, if the tariff gave such enormous
profits to iron producers as the free traders said it did,
these free traders did not go to work and make iron. So
far as concerned those producers who derived no special
advantage from patent rights or combinations, Mr.
Greeley was right enoughthe fact that there was no
special rush to get into the business proving that iron
producers as producers were making on the average no
more than ordinary profits. And could iron be made
from air, this fact would have shown what Mr. Greeley
seems to have imagined it did, though it would not have

* A striking illustration of the way American industry has been
encouraged by a duty which enabled the stockholders in a couple of
copper-mines to pay dividends of over a hundred per cent, is
afforded by the following case : Some years ago a Dutch ship arrived
at Boston having in her hold a quantity of copper with which her
master proposed to have her resheathed in Boston. But learning
that in this "land of liberty" he would not be permitted to take the
copper from the inside of his ship and employ American mechanics
to nail it on the outside, without paying a duty of forty-five per
cent, on the new copper put on, as well as a duty of four cents per
pound on the old copper taken off, he found it cheaper to sail in
ballast to Halifax, get his ship re-coppered by Canadian workmen,
and then come back to Boston for his return cargo.

PROTECTION AND PRODUCERS. 177

shown that the nation was not losing greatly by the
duty. But iron cannot be made from air ; it can only
be made from iron ore. And though Nature, especially
in the United States, has provided abundant supplies of
iron ore, she has not distributed them equally, but has
stored them in large deposits in particular places. If
inclined to take Horace Greeley's advice to go and make
iron, should I think its price too high, I must obtain
access to one of these deposits, and that a deposit suffi-
ciently near to other materials and to centers of popula-
tion. I may find plenty of such deposits which no one is
using, but where can I find such a deposit that is free to
be used by me ?

The laws of my country do not forbid me from mak-
ing iron, but they do allow individuals to forbid me from
making use of the natural material from which alone
iron can be madethey do allow individuals to take
possession of these deposits of ore which Nature has
provided for the making of iron, and to treat and hold
them as though they were their own private property,
placed there by themselves and not by God. Conse-
quently these deposits of iron ore are appropriated as
soon as there is any prospect that any one will want to
use them, and when I find one that will suit my purpose
I find that it is in the possession of some owner who will
not let me use it until I pay him down in a purchase
price, or agree to pay him in a royalty of so much per ton,
nearly, if not quite, all I can make above the ordinary
return to capital in producing iron. Thus, while the
duty which raises the price of iron may not benefit
producers, it does benefit the dogs in the manger whom
our laws permit to claim as their own the stores which
eons before man appeared were accumulated by Nature
for the use of the millions who would one day be called
into being enabling the monopolists of our iron land to

178 PBOTECTION OB TREE TRADE?

levy heavy taxes on their fellow-citizens long before they
could otherwise have done so.* So with the duty on
coal. It adds nothing to the profits of the coal operator
who buys the right to take coal out of the earth, but it
does enable a ring of coal-land- and railway-owners to
levy in many places an additional blackmail upon the use
of Nature's bounty.

The motive and effect of many of our duties are well
illustrated by the import duty we levy on borax and
boracic acid. We had no duties on borax and boracic
acid (which have important uses in many branches of
manufacture) until it was discovered that in the State of
Nevada Nature had provided a deposit of nearly pure
borax for the use of the people of this continent. This
free gift of the Almighty having been reduced to private
ownership, in accordance with the laws of the United
States for such cases made and provided, the enterpris-
ing forestallers at once applied to Congress for (and of
course secured) the imposition of a duty which would

* The royalty paid by iron-miners for the privilege of taking the
ore out of the earth in many cases equals and in some cases exceeds
the cost of mining it. The royalties of the Pratt Iron and Coal
Company of Alabama are said to run as high as $10,000 per acre.
In the Chicago Inter-Ocean, a stanch protectionist paper, of Octo-
ber 11, 1885, 1 find a description of the Colby Iron-Mine at Bessemer,
Mich. This mine, it is said, is owned by parties who got it for
$1.25 per acre. They lease the privilege of taking out ore on a
royalty of 40 cents per ton to the Colbys, who sub-lease it to Morse
& Co. for 52 cents per ton royalty, who have a contract with Cap-
tain Sellwood to put the ore on the cars for 87 cents per ton. Sell-
wood sub-lets this contract for 12| cents per ton, and the sub-con-
tractors are said to make a profit of 2| cents per ton, as the work is
done by a steam-shovel. Deducting transportation, etc., the ore
brings $2.80 per ton, as mined, of which only 12| cents goes to the
firm who do the actual work of production. The output is 1200
tons per day, which, according to the Inter- Ocean correspondent,
gives to the owners a net profit of $480 per day ; to the Colbys, $150
^er day; Morse & Co., $1680; Captain Sellwood, $90 per day; and

PROTECTION AND PRODUCERS. 179

make borax artificially dear and increase the profits of
this monopoly of a natural advantage.

While our manufacturers and other producers have
been caught readily enough with the delusive promise
that protection would increase their profits, and have
used their influence to institute and maintain protective
duties, I am inclined to think that the most efficient
interest on the side of protection in the United States
has been that of those who have possessed themselves of
lands or other natural advantages which they hoped pro-
tection would make more valuable. For it has been not
merely the owners of coal, iron, timber, sugar, orange,
or wine lands, of salt-springs, borax lakes, or copper
deposits, who have seen in the shutting out of foreign
competition a quicker demand and higher value for
their lands, but the same feeling has had its influence
upon the holders of city and village real estate, who,
realizing that the establishment of factories or the work-
ing of mines in their vicinity would give value to their

the sub-contractors who do the work of mining, $30 per day, " a total
net profit from the mine, over and above what profit there may be
in the labor, of $2430 per day." The account concludes by saying:
"As the product will be at least doubled during the coming year,
you see there will be some fortunes made out of the Colby mine."
To these fortunes our protective duty on foreign ore undoubtedly
contributes, but how much does it in this case encourage production!
In Lebanon County, Pennsylvania, is a hill of magnetic iron ore
nearly pure, which has merely to be quarried out. It is owned by
the Coleman heirs, and has made them so enormously wealthy that
these are said by some to be the richest people in the United States,
They are producers of iron, smelting their own ore, as well as rail
way-owners and farmers, owning and cultivating by superintendents
great tracts of valuable land. They, doubtless, have been much
encouraged by the duty on iron which we have maintained for "the
protection of American labor," but this encouragement comes to
them as owners of this rich gift of Nature to Mr. Coleman's heirs.
The deposit of iron ore would be worked were there no duty, and
was worked, I believe, before any duty on iron was imposed.

180 PROTECTION OB FREE TRADE!

lots, have been disposed to support a policy which had
for its avowed object the transfer of such industries
from other countries to our own.

To repeat: It is only at first that a protective duty
can stimulate an industry. When the forces of produc-
tion have had time to readjust themselves, profits in the
protected industry, unless kept up by obstacles which
prevent further extension of the industry, must sink to
the ordinary level, and the duty losing its power of
further stimulation ceases to yield any advantage to
producers unprotected against home competition. This
is the situation of the greater part of "protected"
American producers. They feel the general injury of
the system without really participating in its special
benefits.

How, then, it may be asked, is it that even these pro-
ducers who are not sheltered by any home protection are
in general so strongly in favor of a protective tariff!
The true reason is to be found in the causes I will here-
after speak of, which predispose the common mind to an
acceptance of protective ideas. And, while keen enough
as to their individual interests, these producers are as
blind to social interests as any other class. They have
so long heard and been accustomed to repeat, that free
trade would ruin American industry, that it never occurs
to them to doubt it; and the effect of duties upon so
many other products being to enhance the cost of their
own productions, they see, without apprehending the
cause, that were it not for the particular duty that pro-
tects them they could be undersold by foreign products,
and so they cling to the system. Protection is necessary
to them in many cases, because of the protection of other
industries. But were the whole system abolished there
can be no doubt that American industry would spring
forward with new vigor.

CHAPTER XVIII.

EFFECTS OF PROTECTION ON AMERICAN INDUSTRY.

E there is one country in the world where the assump-
ion that protection is necessary to the development
of manufactures and the "diversification of industry "
is conclusively disproved by the most obvious facts, that
country is the United States. The first settlers in
America devoted themselves to trade with the Indians
and to those extractive industries which a sparse popula-
tion always finds most profitable, the produce of the
forest, of the soil, and of the fisheries, constituting their
staples, while even bricks and tiles were at first imported
from the mother country. But without any protection
and in spite of British regulations intended to prevent
the growth of manufactures in the colonies, one industry
after another took root, as population increased, until at
the time of the first Tariff Act, in 1789, all the more
important manufactures, including those of iron and
textiles, had become firmly established. As up to this
time they had grown without any tariff, so must they
have continued to grow with the increase of population,
even if we had never had a tariff.

But the American who contends that protection is
necessary to the diversification of industry must not
merely ignore the history of his country during that long
period before the first tariff of any kind was instituted,

181

182 PEOTECTION OB FREE TRADE!

but he must ignore what has been going on ever since,
and is still going on under his eyes.

We need look no further back than the formation of
the Union to see that if it were true that manufacturing
could not grow up in new countries without the protec-
tion of tariffs the manufacturing industries of the United
States would to-day be confined to a narrow belt along
the Atlantic seaboard. Philadelphia, New York and
Boston were considerable cities, and manufactures had
taken a firm root along the Atlantic, when Western New
York and Western Pennsylvania were covered with
forests, when Indiana and Illinois were buffalo-ranges,
when Detroit and St. Louis were trading-posts, Chicago
undreamed of, and the continent beyond the Mississippi
as little known as the interior of Africa is now. In the
United States, the East has had over the West all the
advantages which protectionists say make it impossible
*or a new country to build up its manufacturing indus-
tries against the competition of an older country larger
capital, longer experience, and cheaper labor. Yet with-
out any protective tariff between the West and the East,
manufacturing has steadily moved westward with the
movement of population, and is moving westward still.
This is a fact that of itself conclusively disproves the
protective theory.

The protectionist assumption that manufactures have
increased in the United States because of protective
tariffs is even more unfounded than the assumption that
the growth of New York after the building of each new
theater was because of the building of the theater. It
is as if one should tow a bucket behind a boat and insist
that it helped the boat along because she still moved for-
ward. Manufacturing has increased in the United States
because of the growth of population and the development
of the country ; not because of tariffs, but in spite of them.

EFFECTS OF PROTECTION ON AMERICAN INDUSTRY. 183

That protective tariffs have injured instead of helped
American manufactures is shown by the fact that our
manufactures are much less than they ought to be, con-
sidering our population and development much less
relatively than they were in the beginning of the cen-
tury. Had we continued the policy of free trade our
manufactures would have grown up in natural hardihood
and vigor, and we should now not only be exporting
manufactured goods to Mexico and the West Indies,
South America and Australia, as Ohio is exporting
manufactured goods to Kansas, Nebraska, Colorado and
Dakota, but we should be exporting manufactured goods
to Great Britain, just as Ohio is to-day exporting manu-
factured goods to Pennsylvania and New York, where
manufactures began before Ohio was settled. But so
heavily are our manufactures weighted by a tariff which
increases the cost of all their materials and appliances,
that, in spite of our natural advantages and the inven-
tiveness of our people, our sales are confined to our pro-
tected market, and we can nowhere compete with the
manufactures of other countries. In spite of the increase
of duties with which we have attempted to keep out for-
eign importations and build up our own manufacturing
industries, the great bulk of our importations to-day are
of manufactured goods, while all but a trivial percentage
of our exports consist of raw materials. Even where we
import largely from such countries as Brazil, which have
almost no manufactures of their own, we cannot send
them in return the manufactured goods they want, but
to pay for what we buy of them must send our raw
materials to Europe.

This is not a natural condition of trade. The United
States have long passed the stage of growth in which
raw materials constitute the only natural exports. We
have now a population of nearly sixty millions, and con-

184 PROTECTION OR FREE TRADE!

sume more manufactured goods than any other nation.
We possess unrivaled advantages for manufacturing. In
extent and accessibility our coal deposits far surpass
those of any other civilized country, while we have reser-
voirs of natural gas that supply fuel almost without
labor. Moreover, we are the first of civilized nations in
the invention and use of machinery, and in the economy
of material and labor. But all these advantages are
neutralized by the wall of protection we have built along
our coasts.

For as long as I can remember, the protectionist press
has been from time to time chronicling the fact that con-
siderable orders for this, that or the other American
manufacture had been received from abroad, as proving
that protection was at last beginning to bring about the
results promised for it, and that American manufacturing
industry, so safely guarded during its infancy by a pro-
tective tariff, was now about to enter the markets of the
world. The statements that have been made the basis
of these congratulations have generally been true, but
the predictions founded upon them have never been veri-
fied, and, while our population has doubled, our exports
of manufactured articles have relatively declined. The
explanation is this : The higher rates of wages that have
prevailed in the United States, and the consequent
higher standard of general intelligence, have stimulated
American invention, and we are constantly making
improvements upon the tools, methods and patterns
elsewhere in use. These improvements are constantly start-
ing a foreign demand for American manufactures which
seems to promise large increase. But before this increase
takes place the improvements are adopted in countries
where manufacturing is not so heavily burdened by taxes
on material, and what should have been peculiarly an
American manufacture is transferred to a foreign country.

EFFECTS OF PROTECTION ON AMERICAN INDUSTRY. 185

Every American who has visited London has doubtless
noticed, opposite the Parliament House at Westminster,
a shop devoted to the sale of "American notions."
There are a number of such shops in London, and they
are also to be found in every town of any size in the
three kingdoms. These shops must sell in the aggregate
quite an amount of American tools and contrivances,
which in part accounts for the fact that we still export
some manufactures. But the American will be deluded
who, from the number of these shops and the interest
taken by the people who are constantly looking in the
windows or examining the goods, imagines that Ameri-
can manufactures are beginning to gain a foothold in
the Old World. These shops are in fact curiosity-shops,
just as are the Chinese and Japanese shops that we find
in the larger American cities, and people go to them to
see the ingenious things the Americans are getting up.
But no sooner do these shops so far popularize an
"American notion" that a considerable demand for it
arises, than some English manufacturer at once begins
to make it, or the American inventor, if he holds an
English patent, finds more profit in manufacturing it
abroad. Not having the discouragements of American
protection to contend with, he can make it in Great Brit-
ain cheaper than in the United States, and the conse-
quence of the introduction of an American " notion " is
that, instead of its importation from America increasing,
it comes to an end.

This illustrates the history of American manufactures
abroad. One article after another which has been
invented or improved in the United States has seemed to
get a foothold in foreign markets only to lose it when
fairly introduced. We have sent locomotives to Russia,
arms to Turkey and Germany, agricultural implements
to England, river steamers to China, sewing-machines to

186 PROTECTION OR FREE TKADEf

all parts of the world, but have never been able to hold
the trade our inventiveness should have secured.

But it is on the high seas and in an industry in which
we once led the world that the effect of our protective
policy can be most clearly seen.

Thirty years ago ship-building had reached such a
pitch of excellence in this country that we built not only
for ourselves but for other nations. American ships
were the fastest sailers, the largest carriers, and every-
where got the quickest despatch and the highest freights.
The registered tonnage of the United States almost
equaled that of Great Britain, and a few years promised
to give us the unquestionable supremacy of the ocean.

The abolition of the more important British protective
duties in 1846 was followed in 1854 by the repeal of the
Navigation Laws, and from- thenceforth not only were
British subjects free to buy or build ships wherever they
pleased, but the coasting trade of the British Isles was
thrown open to foreigners. Dire were the predictions
of British protectionists as to the utter ruin that was
thus prepared for British commerce. The Yankees were
to sweep the ocean, and " half -starved Swedes and Nor-
wegians n were to drive the " ruddy, beef-eating English
tar" from his own seas and channels.

While one great commercial nation thus abandoned
protection, the other redoubled it. The breaking out of
our civil war was the golden opportunity of protection,
and the unselfish ardor of a people ready to make any
sacrifice to prevent the dismemberment of their country
was taken advantage of to pile protective taxes upon
them. The ravages of Confederate cruisers and the
consequent high rate of insurance on American ships
would under any circumstances have diminished our
deep-sea commerce; yet this effect was only temporary,
and but for our protective policy we should at the end of

EFFECTS OF PROTECTION ON AMERICAN INDUSTRY. 187

the war have quickly resumed our place in the carrying
trade of the world and moved forward to the lead with
more vigor than ever.

But crushed by a policy which prevents Americans
from building, and forbids them to buy ships, our com-
merce, ever since the war, has steadily shrunk, until
American ships, which, when we were a nation of twenty-
five millions, plowed every sea of the globe, are now,
when we number nearly sixty millions, seldom seen on
blue water. In Liverpool docks, where once it seemed
as if every other vessel was American, you must search
the forests of masts to find one. In San Francisco Bay
you may count English ship, and English ship, and Eng-
lish ship, before you come to an American, while five-
sixths of the foreign commerce of New York is carried
on in foreign bottoms. Once no American dreamed of
crossing the Atlantic save on an American ship ; to-day
no one thinks of taking one. It is the French and the
Germans who compete with the British in carrying
Americans to Europe and bringing them back. Once
our ships were the finest on the ocean. To-day there is
not a first-class ocean carrier under the American flag,
and but for the fact that foreign vessels are absolutely
prohibited from carrying between American ports, ship-
building, in which we once led the world, would now be
with us a lost art. As it is, we have utterly lost our
place. When I was a boy we confidently believed that
American war-ships could outsail, when they could not
outfight, anything that floated, and in the event of war
with a commercial nation we knew that every sea of the
globe would swarm with swift American privateers.
To-day, the ships on which we have wasted millions are,
for purposes of modern warfare, as antiquated as Roman
galleys. Compared with the vessels of other nations
they can neither fight nor run; while, as for privateers

188 PEOTECTION OR FREE TRADE!

or chartered vessels, Great Britain could take from those
greyhounds of the sea which American travel and trade
support, enough fleet ships to snap up any vessel that
ventured out of an American port.

I do not complain of the inefficiency of our navy. The
maintenance of a navy in time of peace is unworthy of
the dignity of the Great Republic and of the place she
should aspire to among the nations, and to my mind the
hundreds of millions that during the last twenty years
we have spent upon our navy would have been as truly
wasted had they secured us good ships. But I do com-
plain of the decadence in our ability to build ships. Our
misfortune is not that we have no navy, but that we
lack the swift merchant fleet, the great foundries and
ship-yards, the skilled engineers and seamen and me-
chanics, in which, and not in navies, true power upon
the seas consists. A people in whose veins runs the
blood of Vikings have been driven off the ocean by them-
selves.

Of course the selfish interests that profit, or imagine
they profit, by the policy which has swept the American
flag from the ocean as no foreign enemy could have
done, ascribe this effect to every cause but the right one.
They say, for instance, that we cannot compete with
other nations in ocean commerce, because they have an
advantage in lower wages and cheaper capital, in wilful
disregard of the fact that when the difference in wages
and interest between the two sides of the Atlantic was
far greater than now we not only carried for ourselves
but for other nations, and were rapidly rising to the
position of the greatest of ocean carriers. The truth is,
that if wages are higher with us this is really to our
advantage, while not only can capital now be had as
cheaply in New York as in London, but American capital
is actually being used to run vessels under foreign flags,

EFFECTS OF PROTECTION ON AMERICAN INDUSTRY. 189

because of the taxes which make it unprofitable to build
or run American vessels.

De Tocqueville, fifty years ago, was struck with the
fact that nine-tenths of the commerce between the
United States and Europe and three-fourths of the
commerce of the New World with Europe was carried in
American ships; that these ships filled the docks of
Havre and Liverpool, while but few English and French
vessels were to be seen at New York. This, he saw,
could only be explained by the fact that " vessels of the
United States can cross the seas at a cheaper rate than
any other vessels in the world." But, he continues :

It is difficult to say for what reason the American can trade at a
lower rate than other nations ; and one is at first sight led to attrib-
ute this circumstance to the physical or natural advantages which
are within their reach; but this supposition is erroneous. The
American vessels cost almost as much as our own; they are not
better built, and they generally last for a shorter time, while the pay
of the American sailor is more considerable than the pay on board
European ships. I am of opinion that the true cause of their superi-
ority must not be sought for in physical advantages but that it is
wholly attributable to their moral and intellectual qualities.

. . . The European sailor navigates with prudence ; he only
sets sail when the weather is favorable ; if an unforeseen accident
befalls him, he puts into port; at night he furls a portion of his
canvas; and when the whitening billows intimate the vicinity of
land, he checks his way and takes an observation of the sea. But
the American neglects these precautions, and braves these dangers.
He weighs anchor in the midst of tempestuous gales ; by night and
by day he spreads his sheets to the wind ; he repairs as he goes along
such damages as his vessel may have sustained from the storm ; and
when at last he approaches the term of his voyage he darts onward
to the shore as if he already descried a port. The Americans are
often shipwrecked, but no trader crosses the sea so rapidly, and, as
they perform the same distance in a shorter time, they can perform
it at a cheaper rate.

I cannot better explain my meaning than by saying that the Ameri-
can affects a sort of heroism in his manner of trading, in which he
follows not only a calculation of his gain, but an impulse of his nature.

190 PROTECTION OB FREE TRADEf

What the observant Frenchman describes in somewhat
extravagant language was a real advantage an advan-
tage that attached not merely to the sailing of ships, but
to their designing, their building, and everything con-
nected with them. And what gave this advantage was
not anything in American nature that differed from
other human nature, but the fact that higher wages and
the resulting higher standard of comfort and better
opportunities developed a greater power of adapting
means to ends. In short, the secret of our success upon
the ocean (as of all our other successes) lay in the very
things that according to the exponents of protectionism
now shut us out from the ocean.*

Again, it is said that it is the substitution of steam for
canvas and iron for wood that has led to the decay of

* By way of consolation for the manner in which protectionism
has driven American ships from the ocean, Professor Thompson
("Political Economy," p. 216) says:

" If there were no other reason for the policy that seeks to reduce
foreign commerce to a minimum, a sufficient one would be found in
its effect upon the human material it employs. Bentham thought
the worst possible use that could be made of a man was to hang
him ; a worse still is to make a common sailor of him. The life and
the manly character of the sailor has been so admired in song and
prose, and the real excellences of individuals of the profession have
been made so prominent, that we forget what the mass of this class
of men are, and what representatives of our civilization and Chris-
tianity we send out to all lands in the tenants of the forecastle."

There is some truth in this, but what there is is due to protection-
ism in its broader sense. There is no reason in the nature of his
vocation why the sailor should not be as well fed, well paid and well
treated, as intelligent and self-respecting, as any mechanic. That
he is not is at bottom due to the paternal interference of maritime
law with the relations of employer and employed. The law does not
specifically enforce contracts for services on shore, and for any
breach of contract by an employee the employer has only a civil
remedy. He cannot restrain the employed of his liberty, coerce
him by violence or duress, or, should he quit work, call on the law

EFFECTS OF PROTECTION ON AMERICAN INDUSTRY. 191

American shipping. This is no more a reason for the
decay of American shipping than is the substitution of
the double topsail-yard for the single topsail-yard.
River steamers were first developed here; it was an
American steamship that first crossed from New York to
Liverpool, and thirty years ago American steamers were
making the "crack" passages. The same skill, the same
energy, the same facility of adapting means to ends
which enabled our mechanics to build wooden ships
would have enabled them to continue to build ships no
matter what the change in material. With free trade
we should not merely have kept abreast of the change
from wood to iron, we should have led it. This we
should have done even though not a pound of iron could
have been produced on the whole continent. In the
glorious days of American ship-building Donald McKay

to bring him back, and thus the personal relations of employer and
employed are left to the free play of mutual interest. For services
requiring vigilance and sobriety, and where great loss or danger
would result from a sudden refusal to go on with the work, the
employer must look to the character of the men he employs, and
must so pay and treat them that there will be no danger of their
wishing to leave him. But what on shore is thus left to the self-
regulative principle of freedom is, as to services to be performed on
shipboard, attempted to be regulated on the paternal principle of
protectionism. Here the law steps in to compel the specific per-
formance of contracts, and not only gives the employer or his
representative* the right to restrain the employed of his personal
liberty, and by violence or duress to compel his performance of
services he has contracted for, but if the employed leave the ship
the law may be invoked to arrest, imprison, and force him back.
The result has been on the one hand largely to destroy the incentive
to proper treatment of their crews on the part of owners and masters
of ships, and on the other to degrade the character of seamen.
Crews have been largely obtained by a system of virtual impress-
ment or kidnapping called in longshore vernacular "shanghaing,"
by which men are put on board ship when drunk or even by force,
for the sake of their advance wages or a bonus called "blood-

192 PROTECTION OB FREE TRADE!

of Boston and William H. Webb of New York drew the
materials for their white-winged racers from forests that
were practically almost as far from those cities as they
were from the Clyde, the Humber, or the Thames. Had
our ship-builders been as free as their English rivals to
get their materials wherever they could buy them best
and cheapest, they could as easily have built ships with
iron brought from England as they did build them with
knees from Florida, and planks from Maine and North
Carolina, and spars from Oregon. Ireland produces
neither iron nor coal, but Belfast has become noted for
iron ship-building, and iron can be carried across the
Atlantic almost as cheaply as across the Irish Sea.

But so far from its being necessary to bring iron from
Great Britain, our deposits of iron and coal are larger,
better, and more easily worked than those of Great Brit-
ain, and before the Revolution we were actually export-
ing iron to that country. Had we never embraced the

money," which the power of keeping the men on board and compel-
ling them to work enables the ship-owners safely to pay. The
power that must be intrusted to the master of a ship, on whose skill
and judgment depends the safety of all on board, is necessarily
despotic, but while the abuse of this power has, under a system
which enables a brutal captain to get crews with as much or almost
as much facility as a humane one, been little checked by motives of
self-interest, it has been stimulated by the degradation which such
a system inevitably produces in the character of the crews. Various
attempts have been made to remedy this state of things ; but nothing
can avail much that does not go to the root of the difficulty and lead
the sailor, no matter what contract he may have signed or what
advances have been paid to or for him, as free to quit a vessel as
any mechanic on shore is free to quit his employment. Theoret-
ically the law may guard the rights of one party to a contract as
well as those of the other ; but practically the poor and uninfluential
are always at a disadvantage in appealing to the law. This is a vice
which inheres in all forms of protectionism, from that of absolute
monarchy to that of protective duties.

EFFECTS OF PROTECTION ON AMERICAN INDUSTRY. 193

policy of protection we should to-day have been the first
of iron producers. The advantage that Great Britain
has over us is simply that she has abandoned the repres-
sive system of protection, while we have increased it.
This difference in policy, while it has enabled the British
producer to avail himself of the advantages of all the
world, has handicapped the American producer and
restricted him to the market of his own country. The
ores of Spain and Africa which, for some purposes, it is
necessary to mix with our own ores, have been burdened
with a heavy duty ; a heavy duty has enabled a great
steel combination to keep steel at a monopoly price ; a
heavy duty on copper has enabled another combination
to get a high price for American copper at home, while
exporting it to Great Britain for a low price ; and to
encourage a single bunting factory the very ensign of an
American ship has been subjected to a duty of 150 per
cent. Prom keelson to truck, from the wire in her stays
to the brass in her taffrail log, everything that goes to
the building, the fitting or the storing of a ship is bur-
dened with heavy taxes. Even should she be repaired
abroad she must pay taxes for it on her return home.
Thus has protection strangled an industry in which with
free trade we might still have led the world. And the
injury we have done ourselves has been, in some degree
at least, an injury to mankind. Who can doubt that
ocean steamers would to-day have been swifter and
better had American builders been free to compete with
English builders ?

Though our Navigation Laws, which forbid the carry-
ing of a pound of freight or a single passenger from
American port to American port on any other than an
American-built vessel, obscure the effects of protection
in our coasting trade, they are just as truly felt as in our
ocean trade. The increased cost of building and running

194 PROTECTION OB FREE TRADE?

vessels has, especially as to steamers, operated to stunt
the growth of our coasting trade, and to check by higher
freights the development of other industries. And how
restriction strengthens monopoly is seen in the manner
in which the effect of protection upon our coastwise
trade has been to make easier the extortions of railway
syndicates. For instance, the Pacific Railway pool has
for years paid the Pacific Mail Steamship Company
$85,000 a month to keep up its rates of fare and freight
between New York and San Francisco. It would have
been impossible for the railway ring thus to prevent
competition had the trade between the Atlantic and
Pacific been open to foreign vessels.

CHAPTER XIX.

PROTECTION AND WAGES.

"T7T3 have sufficiently seen the effect of protection on
f T the production of wealth. Let us now inquire as
to its effect on wages. This is a question of the distribu-
tion of wealth.

Discussions of the tariff question seldom go further
than the point we have now reached, for though much is
said, in the United States at least, of the effect of protec-
tion on wages, it is as a deduction from what is asserted
of its effect on the production of wealth. Its advocates
claim that protection raises wages ; but in so far as they
attempt to prove this it is only by arguments, such as we
have examined, that protection increases the prosperity
of a country as a whole, from which it is assumed that it
must increase wages. Or when the claim that protection
raises wages is put in the negative form (a favorite
method with American protectionists) and it is asserted
that protection prevents wages from falling to the lower
level of other countries, this assertion is always based on
the assumption that protection is necessary to enable
production to be carried on at the higher level of wages,
and that if it were withdrawn production would so
decline, by reason of the underselling of home producers
by foreign producers, that wages must also decline *

* Here, for instance, taken from the New York Tribune during
the last Presidential campaign (1884), is a sample of the arguments

195

196 PROTECTION OR FREE TRADE!

But although its whole basis has already been over*
thrown, let us (since this is the most important part of
the question) examine directly and independently the
claim that protection raises (or maintains) wages.

Though the question of wages is primarily a question
of the distribution of wealth, no protectionist writer that
I know of ventures to treat it as such, and free traders
generally stop where protectionists stop, arguing that
protection must diminish the production of wealth, and
(so far as they treat the matter of wages) from this
inferring that protection must reduce wages. For pur-
poses of controversy this is logically sufficient, since, free
trade being natural trade, the onus of proof must lie
upon those who would restrict it. But as my purpose is
more than that of controversy, I cannot be contented
with showing merely the unsoundness of the arguments
for protection. A true proposition may be supported by
a bad argument, and to satisfy ourselves thoroughly as
to the effect of protection we must trace its influence on
the distribution, as well as on the production of wealth.
Error often arises from the assumption that what benefits
or injures the whole must in like manner affect all its

for protection which are manufactured about election-times for the
consumption of " the intelligent and highly paid American working-
man n :

"All workers know that labor in other countries is not paid as
well as it is here. But this difference could not exist if the products
of 50-cent labor in England or Germany or Canada could be sold
freely in our market, instead of the production of $1 labor here.
Hence, this country compels the employers of the 50-cent labor
abroad to pay duty for the privilege of selling their goods in this
market. That duty is called a tariff. If it is made high enough to
fit the difference in rate of wages, so that labor in this country can-
not be degraded toward the level of similar labor in other countries,
it is called a protective tariff. Such a tariff is a defense of American
industry against direct competition with the underpaid labor of other
countries."

PROTECTION AND WAGES. 197

parts. Causes which increase or decrease aggregate
wealth often produce the reverse effect on classes or
individuals. The resort to salt instead of kelp for
obtaining soda increased the production of wealth in
Great Britain, but lessened the income of many High-
land landlords. The introduction of railways, greatly as
they have added to aggregate wealth, ruined the business
of many small villages. Out of wars, destructive to
national wealth though they be, great fortunes arise.
Fires, floods and famines, while disastrous to the com-
munity, may prove profitable to individuals, and he who
has a contract to fill, or who has speculated in stocks for
a fall, may be enriched by hard times.

As, however, those who live by their labor constitute
in all countries the large majority of the people, there is
a strong presumption that no matter who else is bene-
fited, anything that reduces the aggregate income of the
community must be injurious to working-men. But that
we may leave nothing to presumption, however strong,
let us examine directly the effect of protective tariffs on
wages.

Whatever affects the production of wealth may at the
same time affect distribution. It is also possible that
increase or decrease in the production of wealth may,
under certain circumstances, alter the proportions of distri-
bution. But it is only with the first of these questions
that we have now to deal, since the second goes beyond
the question of tariff, and if it shall become necessary to
open it, that will not be until after we have satisfied
ourselves as to the tendencies of protection.

Trade, as we have seen, is a mode of production, and
the tendency of tariff restrictions on trade is to lessen
the production of wealth. But protective tariffs also
operate to alter the distribution of wealth, by imposing
higher prices on some citizens and giving extra profits to

108 PROTECTION OB FREE TRADE?

others. This alteration of distribution in their favor is
the impelling motive with those most active in procuring
the imposition of protective duties and in warning work-
men of the dire calamities that will come on them if such
duties are repealed. But in what way can protective
tariffs affect the distribution of wealth in favor of labor?
The direct object and effect of protective tariffs is to
raise the price of commodities. But men who work for
wages are not sellers of commodities ; they are sellers of
labor. They sell labor in order that they may buy com-
modities. How can increase in the price of commodities
benefit them ?

I speak of price in conformity to the custom of com-
paring other values by that of money. But money is
only a medium of exchange and a measure of the com-
parative values of other things. Money itself rises and
falls in value as compared with other things, varying
between time and time, and place and place. In reality
the only true and final standard of values is labor the
real value of anything being the amount of labor it will
command in exchange. To speak exactly, therefore, the
effect of a protective tariff is to increase the amount of
labor for which certain commodities will exchange.
Hence it reduces the value of labor just as it increases
the value of commodities.

Imagine a tariff that prevented the coming in of
laborers, but placed no restriction on the coming in of
commodities. Would those who have commodities to sell
deem such a tariff for their benefit? Yet to say this
would be as reasonable as to say that a tariff upon com-
modities is for the benefit of those who have labor to sell.

It is not true that the products of lower-priced labor
will drive the products of higher-priced labor out of any
market in which they can be freely sold, since, as we
have already seen, low-priced labor does not mean cheap

PROTECTION AND WAGES. 199

production, and it is the comparative, not the absolute,
cost of production that determines exchanges. And we
have but to look around to see that even in the same
occupation, wages paid for labor whose products sell
freely together are generally higher in large cities than
in small towns, in some districts than in others.

It is true that there is a constant tendency of all wages
to a common level, and that this tendency arises from
competition. But this competition is not the competi-
tion of the goods-market; it is the competition of the
labor-market. The differences between the wages paid
in the production of goods that sell freely in the same
market cannot arise from checks on the competition of
goods for sale ; but manifestly arises from checks on the
competition of labor for employment. As the competi-
tion of labor varies between employment and employ-
ment, or between place and place, so do wages vary.
The cost of living being greater in large cities than in
small towns, the higher wages in the one are not more
attractive than the lower wages in the other, while the
differing rates of wages in different districts are mani-
festly maintained by the inertia and friction which
retard the flow of population, or by causes, physical or
social, which produce differences in the intensity of com-
petition in the labor-market.

The tendency of wages to a common level is quickest
in the same occupation, because the transference of labor
is easiest. There cannot be, in the same place, such
differences in wages in the same industry as may exist
between different industries, since labor in the same
industry can transfer itself from employer tp employer
with far less difficulty than is involved in changing an
occupation. There are times when we see one employer
reducing wages and others following his example, but this
occurs too quickly to be caused by the competition of the

200 PROTECTION OR FREE TRADEt

goods-market. It occurs at times when there is great
competition in the labor-market, and the same conditions
which enable one employer to reduce wages enable others
to do the same. If it were the competition of the goods-
market that brought wages to a level, they could not be
raised in one establishment or in one locality unless at
the same time raised in others that supplied the same
market ; whereas, at the times when wages go up, we see
workmen in one establishment or in one locality first
demanding an increase, and then, if they are successful,
workmen in other establishments or localities following
their example.

If we pass now to a comparison of occupation with
occupation, we see that although there is a tendency to a
common level, which maintains between wages in differ-
ent occupations a certain relation, there are, in the same
time and place, great differences of wages. These differ-
ences are not inconsistent with this tendency, but are
due to it, just as the rising of a balloon and the falling
of a stone exemplify the same physical law. While the
competition of the labor-market tends to bring wages in
all occupations to a common level, there are differences
between occupations (which may be summed up as differ-
ences in attraction and differences in the difficulty of
access) that check in various degrees the competition of
labor and produce different relative levels of wages.
Though these differences exist, wages in different occu-
pations are nevertheless held in a certain relation to each
other by the tendency to a common level, so that a
reduction of wages in one trade tends to bring about a
reduction in others, not through the competition of the
goods-market, but through that of the labor-market.
Thus cabinet-makers, for instance, could not long get $2
where workmen in other trades as easily learned and
practised were only getting $1, since the superior wages

PROTECTION AND WAGES. 201

would so attract labor to cabinet-making as to increase
competition and bring wages down. But if the cabinet-
makers possessed a union strong enough strictly to limit
the number of new workmen entering the trade, is it not
clear that they could continue to get $2 while in other
trades similar labor was getting only $1 ? As a matter
of fact, trades-unions, by checking the competition of
labor, have considerably raised wages in many occupa-
tions, and have even brought about differences between
the wages of union and non-union men in the same occu-
pation. And what limits the possibility of thus raising
wages is clearly not the free sale of commodities, but the
difficulty of restricting the competition of labor.

Do not these facts show that what American workmen
have to fear is not the sale in our goods-market of the
products of "cheap foreign labor," but the transference
to our labor-market of that labor itself ? Under the con-
ditions existing over the greater part of the civilized
world, the minimum of wages is fixed by what econo-
mists call the "standard of comfort" that is to say, the
poorer the mode of life to which laborers are accustomed
the lower are their wages and the greater is their ability
to compel a reduction in any labor-market they enter.
What, then, shall we say of that sort of "protection of
American working-men" which, while imposing duties
upon goods, under the pretense that they are made by
"pauper labor," freely admits the "pauper laborer"
himself?

The incoming of the products of cheap labor is a very
different thing from the incoming of cheap labor. The
effect of the one is upon the production of wealth,
increasing the aggregate amount to be distributed; the
effect of the other is upon the distribution of wealth,
decreasing the proportion which goes to the working-
classes. We might permit the free importation of

202 PROTECTION OB FREE TRADE t

Chinese commodities without in the slightest degree
affecting wages j but, under our present conditions, the
free immigration of Chinese laborers would lessen wages.

Let us imagine under the general conditions of modern
civilization, one country of comparatively high wages,
and another country of comparatively low wages. Let
us, in imagination, bring these countries side by side,
separating them only by a wall which permits the free
transmission of commodities, but is impassable for
human beings. Can we imagine, as protectionist notions
require, that the high-wage country would do all the
importing and the low-wage country all the exporting,
until the demand for labor so lessened in the one country
that wages would fall to the level of the other! That
would be to imagine that the former country would go
on pushing its commodities through this wall and getting
back nothing in return. Clearly the one country would
export no more than it got a return for, and the other
could import no more than it gave a return for. What
would go on between the two countries is the exchange
of their respective productions, and, as previously
pointed out, what commodities passed each way in this
exchange would be determined, not by the difference in
wages between the two countries, nor yet by differences
between them in cost of production, but by differences in
each country in the comparative cost of producing differ-
ent things. This exchange of commodities would go on
to the mutual advantage of both countries, increasing
the amount which each obtained, but no matter to what
dimensions it grew, how could it lessen the demand for
labor or have any effect in reducing wages?

Now let us change the supposition and imagine such a
barrier between the two countries as would prevent the
passage of commodities, while permitting the free pas-
sage of men. No goods produced by the lower-paid

PROTECTION AND WAGES. 203

labor of the one country could now be brought into the
other; but would this prevent the reduction of wages T
Manifestly not. Employers in the higher-wage country,
being enabled to get in laborers willing to work for less,
could quickly lower wages.

What we may thus see by aid of the imagination
accords with what we do see as a matter of fact. In
spite of the high duties which shut out commodities on
the pretense of protecting American labor, American
workmen in all trades are being forced into combinations
to protect themselves by checking the competition of the
labor-market. Our protective tariff on commodities
raises the price of commodities, but what raising there is
of wages has been accomplished by trades-unions and
the Knights of Labor. Break up these organizations
and what would the tariff do to prevent the forcing
down of wages in all the now organized trades?

A scheme really intended for the protection of work
ing-men from the competition of cheap labor would not
merely prohibit the importation of cheap labor under
contract, but would prohibit the landing of any laborer
who had not sufficient means to raise him above the
necessity of competing for wages, or who did not give
bonds to join some trades-union and abide by its rules,
And if, under such a scheme, any duties on commodities
were imposed, they would be imposed, in preference, on
such commodities as could be produced with small capis
tal, not on those which require large capital that is to
say, the effort would be to protect industries in which
workmen can readily engage on their own account,
rather than those in which the mere workman can never
hope to become his own employer.

Our tariff, like all protective tariffs, aims at nothing of
this kind. It shields the employing producer from com-
petition, but in no way attempts to lessen competition

204 PROTECTION OR FREE TRADE?

among those who must sell him their labor; and the
industries it aims to protect are those in which the mere
workman, or even the workman with a small capital, is
helpless those which cannot be carried on without largn
establishments, costly machinery, great amounts of capi
tal, or the ownership of natural opportunities which beaJ
a high price.

It is manifest that the aim of protection is to lessen
competition in the selling of commodities, not in the
selling of labor. In no case, save in the peculiar and
exceptional cases I shall hereafter speak of, can a tariff
on commodities benefit those who have labor, not com-
modities, to sell. Nor is there in our tariff any provision
that aims at compelling such employers as it benefits to
share their benefits with their workmen. While it gives
these employers protection in the goods-market it leaves
them free trade in the labor-market, and for any protec-
tion they need workmen have to organize.

I am not saying that any tariff could raise wages. I
am merely pointing out that in our protective tariff there
is no attempt, however inefficient, to do this that the
whole aim and spirit of protection is not the protection
of the sellers of labor but the protection of the buyers of
labor, not the maintaining of wages but the maintaining
of profits. The very class that profess anxiety to pro-
tect American labor by raising the price of what they
themselves have to sell, notoriously buy labor as cheap
as they can and fiercely oppose any combination of work-
men to raise wages. The cry of " protection for Ameri-
can labor" comes most vociferously from newspapers
that lie under the ban of the printers 7 unions ; from coal
and iron lords who, importing "pauper labor" by
wholesale, have bitterly fought every effort of their men
to claim anything like decent wages ; and from factory-
owners who claim the right to dictate the votes of men.

PROTECTION AND WAGES. 205

The whole spirit of protection is against the rights of
labor.

This is so obvious as hardly to need illustration, but
there is a case in which it is so clearly to be seen as to
tempt me to reference.

There is one kind of labor in which capital has no
advantage, and that a kind which has been held from
remote antiquity to redound to the true greatness and
glory of a country the labor of the author, a species of
labor hard in itself, requiring long preparation, and in
the vast majority of cases extremely meager in its pecu-
niary returns. What protection have the protectionist
majorities that have so long held sway in Congress given
to this kind of labor? While the American manufac-
turer of books the employing capitalist who puts them
on the market has been carefully protected from the
competition of foreign manufacturers, the American
author has not only not been protected from the com-
petition of foreign authors, but has been exposed to the
competition of labor for which nothing whatever is paid.
He has never asked for any protection save that of com-
mon justice,' but this has been steadily refused. Foreign-
made books have been saddled with a high protective
duty, a force of customs examiners is maintained in the
post-office, and an American is not even allowed to
accept the present of a book from a friend abroad with-
out paying a tax for it.* But this is not to protect the

* Although a great sum is raised in the United States every year
to send the Bible to the heathen in foreign parts, we impose for the
protection of the home "Bible manufacturer" a heavy. tax upon the
bringing of Bibles into our country. There have recently been
complaints of the smuggling of Bibles across our northern frontier,
which have doubtless inspired our custom-house officers to renewed
vigilance, since, according to an official advertisement, the following
property seized for violation of the United States revenue laws was

206 PROTECTION OB FREE TRADE t

American author, who as an author is a mere laborer,
but to protect the American publisher, who is a capitalist
And this capitalist, so carefully protected as to what he
has to sell, has been permitted to compel the American
author to compete with stolen labor. Congress, which
year after year has been maintaining a heavy tariff, on
the hypocritical plea of protecting American labor, has
steadily refused the bare justice of acceding to an inter-
national copyright which would prevent American pub-
lishers from stealing the work of foreign authors, and
enable American authors not only to meet foreign authors
on fair terms at home, but to get payment for their
books when reprinted in foreign countries. An inter-
national copyright, demanded as it is by honor, by
morals and by every dictate of patriotic policy, has
always been opposed by the protective interest.* Could
anything more clearly show that the real motive of pro-
tection is always the profit of the employing capitalist,
never the benefit of labor?

What would be thought of the Congressman who
should propose, as a " working-man's measure," to divide
the surplus in the treasury between two or three railway
kings, and who should gravely argue that to do this
would be to raise wages in all occupations, since the
railway kings, finding themselves so much richer, would
at once raise the wages of their employees ; which would
lead to the raising of wages on all railways, and this
again to the raising of wages in all occupations ? Yet the

sold at public auction in front of the Custom-House, Detroit, on
Saturday, February 6, 1886, at 12 o'clock noon : 1 set silver jewelry,
3 bottles of brandy, 7 yards astrakhan, 1 silk tidy, 7 books, 1 shawl,
1 sealskin cloak, 4 rosaries, 1 woolen shirt, 2 pairs of mittens, 1 pair
of stockings, 1 bottle of gin, 1 Bible.

* An exception is to be made in favor of Horace Greeley, who,
though a protectionist, did advocate an international copyright.

PROTECTION AND WAGES. 207

contention that protective duties on goods raise wages
involves just such assumptions.

It is claimed that protection raises the wages of labor
that is to say, of labor generally. It is not merely
contended that it raises wages in the special industries
protected by the tariff. That would be to confess that
the benefits of protection are distributed with partiality,
a thing which its advocates are ever anxious to deny. It
is always assumed by protectionists that the benefits of
protection are felt in all industries, and even the wages
of farm-laborers (in an industry which in the United
States is not and cannot be protected by the tariff) are
pointed to as showing the results of protection.

The scheme of protection is, by checking importation
to increase the price of protected commodities so as to
enable the home producers of these commodities to make
larger profits. It is only as it does this, and so long as
it does this, that protection can have any encouraging
effect at all, -and whatever effect it has upon wages must
be derived from this.

I have already shown that protection cannot, except
temporarily, increase the profits of producers as pro-
ducers, but without regard to this it is clear that the
contention that protection raises wages involves two
assumptions : (1) that increase in the profits of employers
means increase in the wages of their workmen ; and (2)
that increase of wages in the protected occupations
involves increase of wages in all occupations.

To state these assumptions is to show their absurdity.
Is there any one who really supposes that because an
employer makes larger profits he therefore pays higher
wages t

I rode not long since on the platform of a Brooklyn
horse-car and talked with the driver. He told me,
bitterly and despairingly, of his long hours, hard work

208 PROTECTION OB FEEE TRADE!

and poor pay how he was chained to that car, a verier
slave than the horses he drove; and how by turning
himself into this kind of a horse-driving machine he
could barely keep wife and children, laying by nothing for
a " rainy day."

I said to him, " Would it not be a good thing if the
Legislature were to pass a law allowing the companies to
raise the fare from five to six cents, so as to enable them
to raise the wages of their drivers and conductors f "

The driver measured me with a quick glance, and then
exclaimed: "They give us more, because they made
more ! You might raise the fare to six cents or to sixty
cents, and they would not pay us a penny more. No
matter how much they made, we would get no more, so
long as there are hundreds of men waiting and anxious
to take our places. The company would pay higher divi-
dends or water the stock ; not raise our pay."

Was not the driver right ? Buyers of labor, like buyers
of other things, pay, not according to what they can, but
according to what they must. There are occasional
exceptions, it is true ; but these exceptions are referable
to motives of benevolence, which the shrewd business
man keeps out of his business, no matter how much he
may otherwise indulge them. Whether you raise the
profits of a horse-car company or of a manufacturer,
neither will on that account pay any higher wages.
Employers never give the increase of their profits as a
reason for raising the wages of their workmen, though
they frequently assign decreased profits as a reason for
reducing wages. But this is an excuse, not a reason.
The true reason is that the dull times which diminish
their profits increase the competition of workmen for
employment. Such excuses are given only when employ-
ers feel that if they reduce wages their employees will be
compelled to submit to the reduction, since others will

PROTECTION AND WAGES. 209

be glad to step into their places. And where trades-
unions succeed in checking this competition they are
enabled to raise wages. Since my talk with the driver,
the horse-car employees of New York and Brooklyn,
organized into assemblies of the Knights of Labor and
supported by that association, have succeeded in some-
what raising their pay and shortening their hours, thus
gaining what no increase in the profits of the companies
would have had the slightest tendency to give them.

No matter how much a protective duty may increase
the profits of employers, it will have no effect in raising
wages unless it so acts upon competition as to give work-
men power to compel an increase of wages.

There are cases in which a protective duty may have
this effect, but only to a small extent and for a short
time. When a duty, by increasing the demand for a
certain domestic production, suddenly increases the
demand for a certain kind of skilled labor, the wages of
such labor may be temporarily increased, to an extent
and for a time determined by the difficulties of obtaining
skilled laborers from other countries or of the acquire-
ment by ne^r laborers of the needed skill.

But in any industry it is only the few workmen of
peculiar skill who can thus be affected, and even when
by these few such an advantage is gained, it can be main-
tained only by trades-unions that limit entrance to the
craft. The cases are, I think, few indeed in which any
increase of wages has thus been gained by even that
small class of workmen who in any protected industry
require such exceptional skill that their ranks cannot
easily be swelled ; and the cases are fewer still, if they
exist at all, in which the difficulties of bringing workmen
from abroad, or of teaching new workmen, have long
sufficed to maintain such increase. As for the great
mass of those engaged in the protected industries, their

210 PROTECTION OB FREE TRADE!

labor can hardly be called skilled. Much of it can be
performed by ordinary unskilled laborers, and much of
it does not need even the physical strength of the adult
man, but consists of the mere tending of machinery, or
of manipulations which can be learned by boys and girls
in a few weeks, a few days, or even a few hours. As to
all this labor, which constitutes by far the greater part
of the labor required in the industries we most carefully
protect, any temporary effect which a tariff might have
to increase wages in the way pointed out would be so
quickly lost that it could hardly be said to come into
operation. For an increase in the wages of such occupa-
tions would at once be counteracted by the flow of labor
from other occupations. And it must be remembered
that the effect of "encouraging" any industry by taxa-
tion is necessarily to discourage other industries, and
thus to force labor into the protected industries by driv-
ing it out of others.

Nor could wages be raised if the bounty which the
tariff aims to give employing producers were given
directly to their workmen. If, instead of laws intended
to add to the profits of the employing producers in cer-
tain industries, we were to make laws by which so much
should be added to the wages of the workmen, the
increased competition which the bounty would cause
would soon bring wages plus the bounty to the rate at
which wages stood without the bounty. The result
would be what it was in England when, during the early
part of this century, it was attempted to improve the
miserable condition of agricultural laborers by " grants in
aid of wages" from parish rates. Just as these grants
were made, so did the wages paid by the farmers sink.

The car-driver was right. Nothing could raise his
wages that did not lessen the competition of those who
stood ready to take his place for the wages he was get-

PROTECTION AND WAGES. 211

ting. If we were to enact that every car-driver should
be paid a dollar a day additional from public funds, the
result would simply be that the men who are anxious to
get places as car-drivers for the wages now paid would
be as anxious to get them at one dollar less. If we were
to give every car-driver two dollars a day, the companies
would be able to get men without paying them anything,
just as where restaurant waiters are customarily feed by
the patrons, they get little or no wages, and in some
cases even pay a bonus for their places.

But if it be preposterous to imagine that any effect a
tariff may have to raise profits in the protected industries
can raise wages in those industries, what shall we say of
the notion that such raising of wages in the protected
industries would raise wages in all industries? This is
like saying that to dam the Hudson River would raise
the level of New York Harbor and consequently that of
the Atlantic Ocean. Wages, like water, tend to a level,
and unless raised in the lowest and widest occupations
can be raised in any particular occupation only as it is
walled in from competition.

The general rate of wages in every country is mani-
festly determined by the rate in the occupations which
require least special skill, and to which the man who has
nothing but his labor can most easily resort. As they
engage the greater body of labor these occupations con-
stitute the base of the industrial organization, and are to
other occupations what the ocean is to its bays. The
rate of wages in the higher occupations can be raised
above the rate prevailing in the lower, only as the higher
occupations are shut off from the inflow of labor by their
greater risk or uncertainty, by their requirement of
superior skill, education or natural ability, or by restric*
tions such as those imposed by trades-unions. And to
anything like a general rise of wages, or even to

212 PROTECTION OR FREE TRADEt

secure a rise of wages in any occupation upon ingress
to which restrictions are not at the same time placed, it is
necessary to raise wages in the lower and wider occupa-
tions. That is to say, to return to our former illustra-
tion, the level of the bays and harbors that open into it
cannot be raised until the level of the ocean is raised.

If it were evident in no other way, the recognition of
this general principle would suffice to make it clear that
duties on imports can never raise the general rate of
wages. For import duties can only "protect" occupa-
tions in which there is not sufficient labor employed to
produce the supply we need. The labor thus engaged
can never be more than a fraction of the labor engaged
in producing commodities of which we not only provide
the home supply but have a surplus for export, and the
labor engaged in work that must be done on the spot.

No matter what the shape or size of an iceberg, the
mass above the water must be very much less than the
mass below the water. So no matter what be the condi-
tions of a country or what the peculiarities of its indus-
try, that part of its labor engaged in occupations that
can be " protected n by import duties must always be
small as compared with that engaged in occupations that
cannot be protected. In the United States, where pro-
tection has been carried to the utmost, the census returns
show that not more than one-twentieth of the labor of
the country is engaged in protected industries.

In the United States, as in the world at large, th&
lowest and widest occupations are those in which men
apply their labor directly to nature, and of these agricul-
ture is the most important. How quickly the rise of
wages in these occupations will increase wages in all oc-
cupations was shown in the early days of California, as
afterwards in Australia. Had anything happened in
California to increase the demand for cooks or carpenters

PROTECTION AND WAGES. 213

or painters, the rise in such wages would have been
quickly met by the inflow of labor from other occupa-
tions, and in this way retarded and finally neutralized.
But the discovery of the placer-mines, which greatly
raised the wages of unskilled labor, raised wages in all
occupations.

The difference of wages between the United States and
European countries is itself an illustration of this prin-
ciple. During our colonial days, before we had any pro-
tective tariff, ordinary wages were higher here than in
Europe. The reason is clear. Land being easy to
obtain, the laborer could readily employ himself, and
wages in agriculture being thus maintained at a higher
level, the general rate of wages was higher. And since
up to the present time it has been easier to obtain land
here than in Europe, the higher rate of wages in agricul-
ture has kept up a higher general rate.

To raise the general rate of wages in the United States
the wages of agricultural labor must be raised. But our
tariff does not and cannot raise even the price of agricul-
tural produce, of which we are exporters, not importers.
Yet, even had we as dense a population in proportion to
our available land as Great Britain, and were we, like
her, importers not exporters of agricultural productions,
a protective tariff upon such productions could not
increase agricultural wages, still less could it increase
wages in other occupations, which would then have
become the widest. This we may see by the effect of the
corn-laws in Great Britain, which was to increase, not
the wages of the agricultural laborer, nor even the profits
of the farmer, but the rent of the agricultural landlord.
And even if the differentiation between landowner,
farmer and laborer had, under the conditions I speak of,
not become as clear here as in Great Britain, nothing
which benefited the farmer would have the slightest

214 PROTECTION OR FREE TRADE?

tendency to raise wages, save as it benefited him, not as
an owner of land or an owner of capital, but as a laborer.

We thus see from theory that protection cannot raise
wages, That it does not, facts show conclusively. This
has been seen in Spain, in France, in Mexico, in England
during protection times, and everywhere that protection
has been tried. In countries where the working-classes
have little or no influence upon government it is never
even pretended that protection raises wages. It is only
in countries like the United States, where it is necessary
to cajole the working-class, that such a preposterous plea
is made. And here the failure of protection to raise
wages is shown by the most evident facts.

Wages in the United States are higher than in other
countries, not because of protection, but because we have
had much vacant land to overrun. Before we had any
tariff, wages were higher here than in Europe, and far
higher, relatively to the productiveness of labor, than
they are now after our years of protection. In spite of
all our protection and, for the last twenty-four years at
least, protectionists have had it all their own way the
condition of the laboring-classes of the United States has
been slowly but steadily sinking to that of the " pauper
labor n of Europe. It does not follow that this is because
of protection, but it is certain that protection has proved
powerless to prevent it.

To discover whether protection has or has not bene-
fited the working-classes of the United States it is not
necessary to array tables of figures which only an expert
can verify and examine. The determining facts are
notorious. It is a matter of common knowledge that
those to whom we have given power to tax the American
people "for the protection of American industry n pay
their employees as little as they can, and make no scruple
of importing the very foreign labor against whose prod-

PROTECTION AND WAGES. 216

nets the tariff is maintained. It is notorious that wages
in the protected industries are, if anything, lower than in
the unprotected industries, and that, though the pro-
tected industries do not employ more than a twentieth of
the working population of the United States, there occur
in them more strikes, more lockouts, more attempts to
reduce wages, than in all other industries. In the highly
protected industries of Massachusetts, official reports
declare that the operative cannot get a living without
the work of wife and children. In the highly protected
industries of New Jersey, many of the " protected "
laborers are children whose parents are driven by their
necessities to find employment for them by misrepresent*
in? their age so as to evade the State law. In the
higlily protected industries of Pennsylvania, laborers,
for whose sake we are told this high protection is
imposed, are working for sixty-five cents a day, and
half-clad women are feeding furnace fires. "Pluck-me
stores," company tenements and boarding-houses, Pinker,
ton detectives and mercenaries, and all the forms and
evidences of the oppression and degradation of labor are,
throughout the country, characteristic of the protected
industries.

The greater degradation and unrest of labor in the
protected than in the unprotected industries may in part
be accounted for by the fact that the protected employers
have been the largest importers of "foreign pauper
labor." But, in some part at least, it is due to the
greater fluctuations to which the protected industries
are exposed. Being shut off from foreign markets,
scarcity of their productions cannot be so quickly met
by importation, nor surplus relieved by exportation, and
so with them for much of the time it is either " a feast or
a famine." These violent fluctuations tend to bring
workmen into a state of dependence, if not of actual

216 PROTECTION OE FREE TRADE!

peonage, and to depress wages below the general stan-
dard. But whatever be the reason, the fact is that so
far is protection from raising wages in the protected
industries, that the capitalists who carry them on would
soon "enjoy" even lower-priced labor than now, were it
not that wages in them are kept up by the rate of wages
in the unprotected industries.

CHAPTER XX.

THE ABOLITION OF PROTECTION.

OUR inquiry has sufficiently shown the futility and
absurdity of protection. It only remains to con-
sider the plea that is always set up for protection when
other excuses failthe plea that since capital has been
invested and industry organized upon the basis of pro-
tection it would be unjust and injurious to abolish pro-
tective duties at once, and that their reduction must be
gradual and slow. This plea for delay, though accepted
and even urged by many of those who up to this time
have been the most conspicuous opponents of protection,
will not bear examination. If protection be unjust, if it
be an infringement of equal rights that gives certain
citizens the power to tax other citizens, then anything
short of its complete and immediate abolition involves a
continuance of injustice. No one can acquire a vested
right in a wrong ; no one can claim property in a privi-
lege. To admit that privileges which have no other basis
than a legislative Act cannot at any time be taken away
by legislative Act, is to commit ourselves to the absurd
doctrine that has been carried to such a length in Great
Britain, where it is held that a sinecure cannot be
abolished without buying out the incumbent, and that
because a man's ancestors have enjoyed the privilege of
living on other people, he and his descendants, to the

217

218 PROTECTION OB FREE TRADE!

remotest time, have acquired a sacred right to live upon
other people. The true doctrineof which we ought
never, on any pretense, to yield one iota is that enunci-
ated in our Declaration of Independence, the self-evident
doctrine that men are endowed by their Creator with
equal and unalienable rights, and that any law or insti-
tution that uenies or impairs this natural equality may
at any time be altered or abolished. And no more salu-
tary lesson could to-day be taught to capitalists through-
out the world than that justice is an element in the safety
of investments, and that the man who trades upon the
ignorance or the enslavement of a people does so at his
own risk. A few such lessons, and every throne in
Europe would topple, and every great standing army
melt away.

Moreover, abolition at once is the only way in which
the industries now protected could be treated with any
fairness. The gradual abolition of protection would give
rise to the same scrambling and pipe-laying and log-
rolling which every tariff change brings about, and the
stronger would save themselves at the expense of the
weaker.

But further than this, the gradual abolition of protec-
tion would not only continue for a long time, though in
a diminishing degree, the waste, loss and injustice
inseparable from the system, but during all this period
the anticipation of coming changes and the uncertainty
in regard to them would continue to inspire insecurity
and depress business ; whereas, were protection abolished
at once, the shock, whatever it might be, would soon be
over, and exchange and industry could at once reorganize
upon a sure basis. Even on the theory that the abolition
of protection involves temporary disaster, immediate
abolition is as preferable to gradual abolition as amputa-
tion at one operation is to amputation by inches.

THE ABOLITION OP PROTECTION. 219

And to the working-classes the classes for whom
those who deplore sudden change profess to have most
concern the difference would be greater still. It is
always to the relative advantage of the poorer classes
that any change involving disaster should be as sudden
as possible, since the effect of delay is simply to give the
richer classes opportunity to avoid it at the expense of
the poorer.

If there is to be a certain loss to any community,
whether by flood, by fire, by invasion, by pestilence, or
by commercial convulsion, that loss will fall more lightly
on the poor and more heavily on the rich the shorter the
time in which it is concentrated. If the currency of a
country slowly depreciates, the depreciating currency
will be forced into the hands of those least able to pro-
tect themselves, the price of commodities will advance
in anticipation of the depreciation, while the price of
labor will lag along after it ; capitalists will have oppor-
tunity to make secure their loans and to speculate in
advancing prices, and the loss will thus fall with far
greater relative severity upon the poor than upon the
rich. In the same way, if a depreciated currency be
slowly restored to par, the price of labor falls more
quickly than the price of commodities ; debtors struggle
along in the endeavor to pay their obligations in an
appreciating currency, and those who have the most
means are best able to avoid the disadvantages and avail
themselves of the speculative opportunities brought
about by the change. But the more suddenly any given
change in the value of currency takes place the more
equal will be its effects.

So it is with the imposition of public burdens. It is
manifestly to the advantage of the poorer class that any
great public expense be met at once rather than spread
over years by means of public debts. Thus, if the

220 PROTECTION OR FREE TRADET

expenses of our civil war had been met by taxation
levied at the time, such taxation must have fallen heavily
upon the rich. But by the device of a public debt a
twin invention to that of indirect taxation the cost of
the war was not, as was pretended, shifted from present
time to future time (for that would have been possible only
had the means to carry on the war been borrowed from
abroad, which was not the case), but taxation, which
otherwise must have fallen upon individuals in propor-
tion to their wealth, was changed into taxation spread
over a long series of years and falling upon individuals
in proportion, not to their means, but to their consump-
tion, thus imposing upon the poor far greater relative
burdens than upon the rich. Whether the rich would
have had the patriotism to support a war which thus
called upon them for sacrifices more commensurate with
those of the poor, who in all wars furnish the far greater
portion of " the food for powder," is another matter ; but
it is certain that the spreading of the war taxation over
years has not only made the cost of the war many times
greater, but has been to the advantage of the rich and to
the disadvantage of the working-classes.

If the abolition of protection is, as protectionists pre-
dict, certain to disorganize trade and industry, then it is
better for all, and especially is it better for the working-
classes, that the change should be sharp and short. If
the return to a natural condition of trade and produc-
tion must temporarily throw men out of employment,
then it is better that they should be thrown out at once
and have done with it, than that the same loss of
employment should be spread over a series of years with
a constant depressing effect upon the labor-market. In
a sharp but short period of depression the public purse
could, without serious consequences, be drawn upon to
relieve distress, but any attempt to relieve in that way

THE ABOLITION OP PROTECTION. 221

the less general but more protracted distress incident to
a long period of depression, would tend to create an
army of habitual paupers.

But, in truth, the talk about the commercial convul-
sions and industrial distress that would follow the aboli-
tion of protection is as baseless as the story with which
Southern slaveholders during the war attempted to keep
their chattels from running away that the Northern
armies would sell them to Cuba ; as baseless as the pre-
dictions of Republican politicians that the election of a
Democratic President would mean the assumption of the
Confederate debt, if not the revival of the " Lost Cause."

The real fear that underlies all this talk of the disas-
trous effects of the sudden abolition of protection was
well exemplified in a conversation a friend of mine had
awhile ago with a large manufacturer, who belongs to a
combination which prevents competition at home while
the tariff prevents competition from abroad. The manu-
facturer was inveighing against any meddling with the
tariff, and dilating upon the ruin that would be brought
upon the country by free trade.

" Yes," said my friend, who had been listening with an
air of sympathetic attention, "I suppose, if the tariff
were abolished, you would have to shut up your works."

"Well, no; not quite that," said the manufacturer.
" We could go ahead, even with free trade ; but then we
couldn't get the same profit."

The notion that our manufactures would be suspended
and our iron-works closed and our coal-mines shut down
by the abolition of protection is a notion akin to that of
"the tail wagging the dog." Where are the goods to
come from which are thus to deluge our markets, and
how are they to be paid fort There is not productive
power enough in Europe to supply them, nor are there
ships to transport them, to say nothing of the effect

222 PROTECTION OB FREE TRADET

upon European prices of the demands of sixty millions
of people, who, head for head, consume more than any
other people in the world. And since other countries
are not going to deluge us with the products of their
labor without demanding the products of our own labor
in payment, any increase in our imports from the aboli-
tion of protection would involve a corresponding increase
in exports.

The truth is that the change would be not only bene-
ficial to our industries at large four-fifths of which, at
least, are not brought into competition with imported
commodities, but it would be beneficial even to the " pro-
tected " industries. In those that are sheltered by home
monopolies, profits would be reduced ; in those in which
the tariff permits the use of inferior machinery and
slovenly methods, better machinery would have to be
provided and better methods introduced; but in the
great bulk of our manufacturing industries, the effect
would be only beneficial, the reduction in the cost of
material far more than compensating for the reduction
in prices. And with a lower cost of production foreign
markets from which our manufacturers are now shut out
would be opened. If any industry would be " crushed "
it could only be some industry now carried on at national
loss.

The increased power which the removal of restrictions
upon trade would give in the production of wealth would
be felt in all directions. Instead of a collapse there
would be a revivification of industry. Rings would be
broken up, and where profits are now excessive they
would come down; but production would go on under
healthier conditions and with greater energy. American
manufacturers would begin to find markets the whole
world over. American ships would again sail the burh
seas. The Delaware would ring like the Clyde with the

THE ABOLITION OF PROTECTION. 223

clash of riveting hammers, and the United States would
rapidly take that first place in the industrial and com-
mercial world to which her population and her natural
resources entitle her, but which is now occupied by Eng-
land, while legislation and administration would be
relieved of a great cause of corruption, and all govern-
mental reforms would be made easier.

CHAPTER XXI.

INADEQUACY OP THE FREE-TRADE ARGUMENT.

FT1HE point we have now reached is that at which dis-
J_ cussions of the tariff question usually end the
extreme limit to which the avowed champions of the
opposing policies carry their controversy.

We have, in fact, reached the legitimate end of our
inquiry so far as it relates to the respective merits of
protection and free trade. The stream, whose course
our examination has been following, here blends with
other streams, and though it still flows on, it is as part
of a wider and deeper river. As he who would trace the
waters of the Ohio to their final union with the ocean
cannot stop when the Ohio ends, but must still follow on
that mighty Mississippi which unites streams from far
different sources, so, as I said in the beginning, really to
understand the tariff question we must go beyond the
tariff question. This we may now see.

So far as relates to questions usually debated between
protectionists and free traders our inquiry is now com-
plete and conclusive. We have seen the absurdity of
protection as a general principle and the fallacy of the
special pleas that are made for it. We have seen that
protective duties cannot increase the aggregate wealth of
the country that enforces them, and have no tendency to
give a greater proportion of that wealth to the working-

INADEQUACY OF THE FEEE-TEADE ARGUMENT. 225

class. We have seen that their tendencies, on the con*
trary, are to lessen aggregate wealth, and to foster
monopolies at the expense of the masses of the people.

But although we have directly or inferentially dis-
proved every argument that is made for protection,
although we have seen conclusively that protection is in
its nature inimical to general interests, and that free
trade is in its nature promotive of general interests, yet
if our inquiry were to stop here we should not have
accomplished the purpose with which we set out. For
my part, did it end here, I should deem the labor I have
so far spent in writing this book little better than
wasted. For all that we have seen has, with more or
less coherence and clearness, been shown again and
again. Yet protection still retains its hold on the popu-
lar mind. And until something more is shown, protec-
tion will retain this hold.

In exposing the fallacies of protection I have endea-
vored in each case to show what has made the fallacy
plausible, but it still remains to explain why such
exposures produce so little effect. The very conclusive-
ness with which our examination has disproved the
claims of protection will suggest that there must be
something more to be said, and may well prompt the
question, "If the protective theory is really so incon-
gruous with the nature of things and so inconsistent with
itself, how is it that after so many years of discussion it
still obtains such wide and strong support?"

Free traders usually attribute the persistence of the
belief in protection to popular ignorance, played upon
by special interests. But this explanation will hardly
satisfy an unbiased mind. Vitality inheres in truth, not
in error. Though accepted error has always the strength
of habit and authority, and the battle against it must
always be hard at first, yet the tendency of discussion in

226 PROTECTION OB FEEE TBADEt

which error is confronted with truth is to make the truth
steadily clearer. That a theory which seems wholly false
holds its ground in popular belief despite wide and long
discussion, should prompt its opponents to inquire
whether their arguments have really gone to the roots of
popular belief, and whether this belief does not derive
support from truths they have not considered, or from
errors not yet exposed, which still pass for truths
rather than to attribute its vitality to popular incapacity
to recognize truth.

I shall hereafter show that the protective idea does
indeed derive support from doctrines that have been
actively taught and zealously defended by the very
economists who have assailed it (who, so to speak, have
been vigorously defending protection with the right hand
while raining blows upon it with the left), and from
habits of thought which the opponents no less than the
advocates of protection have failed to call in question.
But what I now wish to point out is the inadequacy of
the arguments which free traders usually rely on to
convince working-men that the abolition of protection is
for their interest.

In our examination we have gone as far, and in cer-
tain respects somewhat further than free traders usually
go. But what have we proved as to the main issue!
Merely that it is the tendency of free trade to increase the
production of wealth, and thus to permit of the increase
of wages, and that it is the tendency of protection to
decrease the production of wealth and foster certain
monopolies. But from this it does not follow that the
abolition of protection would be of any benefit to the
working-class. The tendency of a brick pushed off a
chimney-top is to fall to the surface of the ground. But
it will not fall to the surface of the ground if its fall be
intercepted by the roof of a house. The tendency of

INADEQUACY OP THE FREE-TRADE ARGUMENT. 227

anything that increases the productive power of labor is
to augment wages. But it will not augment wages
under conditions in which laborers are forced by com-
petition to offer their services for a mere living.

In the United States, as in all countries where political
power is in the hands of the masses, the vital point in
the tariff controversy is as to its effect upon the earnings
of " the poor people who have to work." *

But this point lies beyond the limit to which free
traders are accustomed to confine their reasoning. They
prove that the tendency of protection is to reduce the
production of wealth and to increase the price of com-
modities, and from this they assume that the effect of the
abolition of protection would be to increase the earnings
of labor. But not merely is such an assumption logically
invalid until it is shown that there is nothing in existing
conditions to prevent the working-classes from getting
the benefit of this tendency; but, although in itself a
natural assumption, it is in the minds of "the poor
people who have to work" contradicted by obvious facts.

In this is the invalidity of the free-trade argument,
and here, and not in the ignorance of the masses, is the
reason why all attempts to convert working-men to the
free-tradeism which would substitute a revenue tariff for
a protective tariff must, save under such conditions as
existed in England forty years ago, utterly fail.

While both sides have shown the same indisposition to
go to the heart of the controversy, there can be no ques-
tion that so far as issue is joined between protectionists
and free traders, in current discussion, the free traders
have the best of the argument.

* I find this suggestive phrase in a protectionist newspaper. But
it well expresses the attitude toward labor of many of the free-trade
writers also.

228 PROTECTION OR FREE TRADE t

But that the belief in protection has survived long and
wide discussion, that it seems to spring up again when
beaten down and to arise with apparent spontaneity in
communities such as the United States, Canada and
Australia, that have grown up without tariffs, and where
the system lacks the advantage of inertia and of enlisted
interests, proves that beyond the discussion there must
be something which strongly commends protection to
the popular mind.

This may also be inferred from what protectionists
themselves say. Beaten in argument, the protectionist
usually falls back upon some declaration which implies
that the real grounds of his belief have been untouched,
and which generally takes the form of an assertion that
though free trade may be true in theory it fails in prac-
tice. In such form the assertion is untenable. A theory
is but an explanation of the relation of facts, and no-
thing can be true in theory that is not true in practice.
But free traders really beg the question when they
answer by merely pointing this out. The real question
is, whether the reasoning on which free traders rely
takes into account all existing conditions? What the
protectionist means, or at least the perception that he
appeals to, when he talks in this way of the difference
between theory and fact, is, that the free-trade theory
does not take into account all existing facts. And this
is true.

As the tariff question is presented, there are indeed,
under existing social conditions, two sides to the shield,
so that men who look only at one side, closing their
eyes to the other, may continue, with equal confidence,
to hold opposite opinions. And that the distinction
between them may, with not entire inaptness, be
described as that of exclusively regarding theory and
that of exclusively regarding facts, we shall see when

INADEQUACY OP THE FREE-TRADE ARGUMENT. 229

we have developed a theory which will embrace all the
facts, and which will explain not only why it is that
honest men have so diametrically differed upon the ques-
tion of protection vs. free trade, but why the advocates
of neither policy have been inclined to press on to that
point where honest differences may be reconciled. For
we have reached the place where the Ohio of the tariff
question flows into the Mississippi of the great social
question. It need not surprise us that both parties to
the controversy, as it has hitherto been conducted,
should stop here, for it would be as rational to expect
any thorough treatment of the social question from the
well-to-do class represented in the English Cobden Club
or the American Iron and Steel Association, or from
their apologists in professorial chairs, as it would be to
look for any thorough treatment of the subject of
personal liberty in the controversies of the slave-holding
Whigs and slave-holding Democrats of forty years ago,
or in the sermons of the preachers whose salaries were
paid by them.

CHAPTER

THE REAL WEAKNESS OF FREE TRADE.

HOW the abolition of protection would stimulate
production, weaken monopolies and relieve govern-
ment of a great cause of corruption, we have seen.

" But what," it will be asked, " would be the gain to
working-men ? Will wages increase ? *

For some time, and to some extent, yes. For the
spring of industrial energy consequent upon the removal
of the dead-weight of the tariff would for a time make
the demand for labor brisker and employment steadier,
and in occupations where they can combine, working-
men would have better opportunity to reduce their hours
and increase their wages, as, since the abolition of the
protective tariff in England, many trades there have
done. But even from the total abolition of protection,
it is impossible to predict any general and permanent
increase of wages or any general and permanent improve-
ment in the condition of the working-classes. The effect
of the abolition of protection, great and beneficial though
it must be, would in nature be similar to that of the
inventions and discoveries which in our time have so
greatly increased the production of wealth, yet have
nowhere really raised wages or of themselves improved
the condition of the working-classes.

230

WEAKNESS OF FREE TRADE. 231

Here is the weakness of free trade as it is generally
advocated and understood.

The working-man asks the free trader : " How will the
change you propose benefit me ? "

The free trader can only answer: "It will increase
wealth and reduce the cost of commodities."

But in our own time the working-man has seen wealth
enormously increased without feeling himself a sharer in
the gain. He has seen the cost of commodities greatly
reduced without finding it any easier to live. He looks
to England, where a revenue tariff has for some time
taken the place of a protective tariff, and there he finds
labor degraded and underpaid, a general standard of
wages lower than that which prevails here, while such
improvements as have been made in the condition of the
working-classes since the abolition of protection are
clearly not traceable to that, but to trades-unions, to
temperance and beneficial societies, to emigration, to
education, and to such acts as those regulating the labor
of women and children, and the sanitary conditions of
factories and mines.

And seeing this, the working-man, even though he
may realize with more or less clearness the hypocrisy of
the rings and combinations which demand tariff duties for
" the protection of American labor/' accepts the fallacies
of protection, or at least makes no effort to throw them
off, not because of their strength so much as of the
weakness of the appeal which free trade makes to him.
A considerable proportion, at least, of the most intelli-
gent and influential of American working-men are fully
conscious that "protection" does nothing for labor, but
neither do they see what free trade could do. And so
they regard the tariff question as one of no practical con-
cern to working-men an attitude hardly less satisfac-
tory to the protected interests than a thorough belief in

232 PROTECTION OR FREE TRADE!

protection. For when an interest is already intrenched
in law and habit of thought, those who are not against it
are for it.

To prove that the abolition of protection would tend
to increase the aggregate wealth is not of itself enough
to evoke the strength necessary to overthrow protection.
To do that, it must be proved that the abolition of pro-
tection would mean improvement in the condition of the
masses.

It is, as I have said, natural to assume that increased
production of wealth would be for the benefit of all, and
to a child, a savage, or a civilized man who lived in his
study and did not read the daily papers, this would
doubtless seem a necessary assumption. Yet, to the
majority of men in civilized society, so far is this assump-
tion from seeming necessary, that current explanations of
the most important social phenomena involve the reverse.

Without question the most important social phenomena
of our time arise from that partial paralysis of industry
which in all highly civilized countries is in some degree
chronic, and which at recurring periods becomes inten-
sified in wide-spread and long-continued industrial
depressions. What is the current explanation of these
phenomena 1 Is it not that which attributes them to
over-production ?

This explanation is positively or negatively supported
even by men who attribute to popular ignorance the
failure of the masses to appreciate the benefits of sub-
stituting a revenue tariff for a protective tariff. But so
long as conditions which bring racking anxiety and
bitter privation to millions are commonly attributed to
the over-production of wealth, is it any wonder that a
reform which is urged on the ground that it would still
further increase the production of wealth should fail to
arouse popular enthusiasm t

THE BEAL WEAKNESS OF FREE TRADE. 233

If, indeed, it be popular ignorance that gives persis-
tence to the belief in protection, it is an ignorance that
extends to questions far more important and pressing
than any question of tariff an ignorance that the advo-
cates of free trade have done nothing to enlighten, and
that they can do nothing to enlighten until they explain
why it is that in spite of the enormous increase of pro-
ductive power that has been going on with accelerating
rapidity all this century it is yet so hard for the mere
laborer to get a living.

In this great fact, that increase in wealth and in the
power of producing wealth does not bring any general
benefit in which all classes share does not for the great
masses lessen the intensity of the struggle to live, lies
the explanation of the popular weakness of free trade.
It is owing to the increasing appreciation of this fact,
and not to accidental causes, that all over the civilized
world the free-trade movement has for some time been
losing energy.

American revenue reformers delude themselves if they
imagine that protection can now be overthrown in the
United States by a movement on the lines of the Cobden
Club. The day for that has passed.

It is true that the British tariff reformers of forty
years ago were enabled on these lines to arouse the
popular enthusiasm necessary to overthrow protection.
But not only did the fact that the British tariff made
food dear enable them to appeal to sympathy and imagi-
nation with a directness and force impossible where the
commodities affected by a tariff are not of such prime
importance; but the feeling of that time in regard to
such reforms was far more hopeful. The great social
problems which to-day loom so dark on the horizon of
the civilized world were then hardly perceived. In the
destruction of political tyranny and the removal of trade

234 PROTECTION OB FREE TRADE!

restrictions ardent and generous spirits saw the emanci-
pation of labor and the eradication of chronic poverty,
and there was a confident belief that the industrial
inventions and discoveries of the new era which the
world had entered would elevate society from its very
foundations. The natural assumption that increase in
the general wealth must mean a general improvement in
the condition of the people was then confidently made.

But disappointment after disappointment has chilled
these hopes, and, just as faith in mere republicanism has
weakened, so the power of the appeal that free traders
make to the masses has weakened with the decline of
the belief that mere increase in the power of production
will increase the rewards of labor. Instead of the aboli-
tion of protection in Great Britain being followed, as
was expected, by the overthrow of protection everywhere,
it is not only stronger throughout the civilized world
than it was then, but is again raising its head in Great
Britain.

It is useless to tell working-men that increase in the
general wealth means improvement in their condition.
They know by experience that this is not true. The
working-classes of the United States have seen the
general wealth enormously increased, and they have also
seen that, as wealth has increased, the fortunes of the
rich have grown larger, without its becoming a whit
easier to get a living by labor.

It is true that statistics may be arrayed in such way as
to prove to the satisfaction of those who wish to believe
it, that the condition of the working-classes is steadily
improving. But that this is not the fact working-men
well know. It is true that the average consumption has
increased, and that the cheapening of commodities has
brought into common use things that were once con-
sidered luxuries. It is also true that in many trades

THE REAL WEAKNESS OP FREE TRADE. 235

wages have been somewhat raised and hours reduced by
combinations among workmen. But although the prizes
that are to be gained in the lottery of life or, if any one
prefers so to call them, the prizes that are to be gained
by superior skill, energy and foresight are constantly
becoming greater and more glittering, the blanks grow
more numerous. The man 01 superior powers and
opportunities may hope to count his millions where a
generation ago he could have hoped to count his tens of
thousands} but to the ordinary man the chances of
failure are greater, the fear of want more pressing. It is
harder for the average man to become his own employer,
to provide for a family and to guard against contin-
gencies. The anxieties attendant on the fear of losing
employment are becoming greater and greater, and the
fate of him who falls from his place more direful. To
prove this it is not necessary to cite the statistics that
show how pauperism, crime, insanity and suicide are
increasing faster than our increase in population. Who
that reads our daily papers needs any proof that the
increase in the aggregate of wealth does not mean
increased ease of gaining a living by labor!

Here is an item which I take from the papers as I
write. I do not take it because equally striking items
are rare, but because I find a comment on it which I
should also like to quote :

STARVED TO DEATH IN OHIO.

DAYTON, 0., August 26. One of the most horrible deaths that
ever occurred in a civilized community was that of Frank Waltzman,
which happened in this city yesterday morning. He has seven chik
dren and a wife, and was once a prominent citizen of Xenia, O. He
tried his hand at any kind of business where he could find opportu-
nity, and finally was compelled to shovel gravel to get a crust for
his children. He worked at this all last week, and on Saturday

236 PROTECTION OB PBEE TRADEf

night was brought home in a wagon, unable to walk. This morning
he was dead. An investigation of the affair established the fact that
the man had starved to death. The family had been without food
for nearly two weeks. His wife tells a horrible story of his death,
saying that while he lay dying his children surrounded his couch and
sobbed piteously for bread.

And here is the typical comment which the New York
Tribune, shocked for a moment out of its attempt to con-
vince working-men that the tariff has improved their
condition, makes upon this item :

STARVED TO DEATH.

The Tribune, Tuesday, laid before its readers a very sad story of
death by literal starvation, at Dayton, O. The details of this case
must have struck many thoughtful persons as more resembling the
catastrophes we are accustomed to regard as appertaining to Euro-
pean life than those indigenous here. The story is old enough in
general outline. First, a merchant, prospering; then decline of
business, bankruptcy, and by degrees destitution, until pride and
shame together brought on the culminating disaster. A few years
ago it would have been said that such a fact was impossible in
America, and certainly there was a time when no one with power
and will to work need have starved in any part of this country.
During that period, too, the strong elasticity and recuperative
power of Americans were the world's wonder. No man thought
much of failure in business. The demand for enterprise of all kinds
was such that no man of ordinary pluck and energy could be kept
down. Perhaps this ability to recover was not so much a national
peculiarity as an effect of the existing state of society. Certainly,
as things settle more and more into regular grooves in the older
States, the parallel between American and European civilization
becomes closer, and the social problems which perplex those societies
are beginning to overshadow this one also. Competition in our
centers of population narrows more and more the field of unmoneyed
enterprise. It is no longer so easy for those who fall to rise again.
And social conventions fetter men more and tend to hold them
within narrower bounds.

The poor fellow who starved to death at Dayton the other day
suffered an Old- World fate. He was down and could not get up.

THE REAL WEAKNESS OF FREE TRADE. 237

He was deprived of his old resources and could not invent new
ones. His large family increased his difficulties. He could not
compete successfully with younger and less handicapped contem-
poraries, and so he sank, as thousands have done in the great capitals
of Europe, but as hitherto very few, it is to be hoped, have sunk in
an American community. Yet this is the tendency of a rapid
increase of population and wealth. The struggle becomes fiercer
all the time ; and while the exactions of society enslave and hamper
the ambitious increasingly, the average fertility of resource and
swift adaptability decline, just as the average skill of workmen de-
clines with the perfection of mechanical appliances. Commerce
and the artificial requirements of social tyranny have already edu-
cated among us a class of people whose lives are a perpetual struggle
and as perpetual an hypocrisy. They could live comfortably if they
could give up display, but they cannot do it, and so they make
themselves wretched and demoralize themselves at the same time.
The sound, healthy American characteristics are being eliminated
in this way, and we are rearing up instead a generation of feeble
folks who may in turn become the parents of such hewers of wood
and drawers of water as the Old- World city masses have long been.
And here, as there, our remedy and regeneration must come from the
more vigorous and better-trained products of the country life.

I will not ask how regeneration is to come from the
more vigorous products of the country life, when every
census shows a greater and greater proportion of our
population concentrating in cities, and when country
roads to the remotest borders are filled with tramps. I
merely reprint this article as a sample of the recognition
one meets everywhere, even on the part of those who
formally deny it, of the obvious fact, that it is becoming
harder and harder for the man who has nothing but his
own exertions to depend on to get a living in the United
States. This fact destroys the assumption that our
protective tariff raises and maintains wages, but it also
makes it impossible to assume that the abolition of pro-
tection would in any way alter the tendency which as
wealth increases makes the struggle for existence harder
and harder. This tendency shows itself throughout the

238 PROTECTION OR FREE TRADEt

civilized world, and arises from the more unequal dis-
tribution which everywhere accompanies the increase of
wealth. How could the abolition of protection affect it?
The worst that can, in this respect, be said of protection
is that it somewhat accelerates this tendency. The best
that could be promised for the abolition of protection is
that it might somewhat restrain it. In England the
same tendency has continued to manifest itself since the
abolition of protection, despite the fact that in other
ways great agencies for the relief and elevation of the
masses have been at work. Increased emigration, the
greater diffusion of education, the growth of trades-unions,
sanitary improvements, the better organization of charity,
and governmental regulation of labor and its conditions
have during all these years directly tended to improve
the condition of the working-class. Yet the depths of
poverty are as dark as ever, and the contrast between
want and wealth more glaring. The Corn-Law
Reformers thought to make hunger impossible, but
though the corn-laws have long since been abolished,
starvation still figures in the mortuary statistics of a
country overflowing with wealth.

While "statisticians" marshal figures to show to
Dives's satisfaction how much richer Lazarus is becom-
ing, here is what the Congregational clergymen of the
greatest and richest of the world's great cities declare in
their " Bitter Cry of Outcast London " :

While we have been building our churches and solacing ourselves
with our religion and dreaming that the millennium was coming,
the poor have been growing poorer, the wretched more miserable
and the immoral more corrupt. The gulf has been daily widening
which separates the lowest classes of the community from our
churches and chapels and from all decency and civilization. It is
easy to bring an array of facts which seem to point to the opposite
conclusion. But what does it all amount tof We are simply living

THE EEAL WEAKNESS OP FREE TBADE. 239

in a fools' paradise if we imagine that all these agencies combined
are doing a thousandth part of what needs to be done. We must
face the facts, and these compel the conclusion that this terrible
flood of sin and misery is gaining on us. It is rising every day.

This is everywhere the testimony of disinterested and
sympathetic observers. Those who are raised above the
fierce struggle may not realize what is going on beneath
them. But whoever chooses to look may see.

And when we take into account longer periods of time
than are usually considered in discussions as to whether
the condition of the working-man has or has not
improved with improvement in productive agencies and
increase in wealth, here is a great broad fact :

Five centuries ago the wealth-producing power of
England, man for man, was small indeed compared with
what it is now. Not merely were all the great inventions
and discoveries which since the introduction of steam
have revolutionized mechanical industry then undreamed
of, but even agriculture was far ruder and less produc-
tive. Artificial grasses had not been discovered. The
potato, the carrot, the turnip, the beet, and many other
plants and vegetables which the farmer now finds most
prolific, had not been introduced. The advantages which
ensue from rotation of crops were unknown. Agricul-
tural implements consisted of the spade, the sickle, the
flail, the rude plow and the harrow. Cattle had not been
bred to more than one-half the size they average now,
and sheep did not yield half the fleece. Roads, where
there were roads, were extremely bad, wheel vehicles
scarce and rude, and places a hundred miles from each
other were, in difficulties of transportation, practically as
far apart as London and Hong Kong, or San Francisco
and New York, are now.

Tet patient students of those times such men as Pro-
fessor Thor old 'Rogers, who has devoted himself to the

240 PROTECTION OE FREE TRADE!

history of prices, and Has deciphered the records of col-
leges, manors and public offices tell us that the condition
of the English laborer was not only relatively, but abso-
lutely better in those rude times than it is in England
to-day, after five centuries of advance in the productive
arts. They tell us that the working-man did not work so
hard as he does now, and lived better; that he was
exempt from the harassing dread of being forced by loss
of employment to want and beggary, or of leaving a
family that must apply to charity to avoid starvation.
Pauperism as it prevails in the rich England of the nine-
teenth century was in the far poorer England of the
fourteenth century, absolutely unknown. Medicine was
empirical and superstitious, sanitary regulations and
precautions were all but unknown. There was fre-
quently plague and occasionally famine, for, owing to the
difficulties of transportation, the scarcity of one district
could not be relieved by the plenty of another. But
men did not, as they do now, starve in the midst of
abundance; and what is perhaps the most significant
fact of all is that not only were women and children not
worked as they are to-day, but the eight-hour system,
which even the working-classes of the United States,
with all the profusion of labor-saving machinery and
appliances, have not yet attained, was then the common
system !

If this be the result of five centuries of such increase in
productive power as has never before been known in the
world, what ground is there for hoping that the mere
abolition of protective tariffs would permanently benefit
working-men f

And not merely do facts of this kind prevent us from
assuming that the abolition of protection could more than
temporarily benefit working-men, but they suggest the

THE REAL WEAKNESS OF FREE TRADE. 241

question, whether it could more than temporarily increase
the production of wealth?

Inequality in the distribution of wealth tends to lessen
the production of wealth on the one side, by lessening
intelligence and incentive among workers ; and, on the
other side, by augmenting the number of idlers and those
who minister to them, and by increasing vice, crime and
waste. Now, if increase in the production of wealth tends
to increase inequality in distribution, not only shall we be
mistaken in expecting its full effect from anything which
tends to increase production, but there may be a point at
which increased inequality of distribution will neutralize
increased power of production, just as the carrying of too
much sail may deaden a ship's way.

Trade is a labor-saving method of production, and the
effect of tariff restrictions upon trade is unquestionably to
diminish productive power. Yet, important as may be the
effects of protection in diminishing the production of
wealth, they are far less important than the waste of pro-
ductive forces which is commonly attributed to the very
excess of productive power. The existence of protective
tariffs will* not suffice to explain that paralysis of indus-
trial forces which in all departments of industry seems to
arise from an excess of productive power, over the demand
for consumption, and which is everywhere leading to com*
binations to restrain production. And considering this,
can we feel quite sure that the effect of abolishing protec-
tion would be more than temporarily to increase the pro-
duction of wealth 1

CHAPTER XXIII.

THE REAL STRENGTH OP PROTECTION.

pleas for protection are contradictory and absurd ;
JL the books in which it is attempted to give it the
semblance of a coherent system are confused and illogical.*

But we all know that the reasons men give for their con-
duct or opinions are not always the true reasons, and that
beneath the reasons we advance to others or set forth to
ourselves there often lurks a feeling or perception which
we may but vaguely apprehend or may even be uncon-
scious of, but which is in reality the determining factor.

I have been at pains to examine the arguments by which

* The latest apology for protection, "Protection vs. Free Trade
the scientific validity and economic operation of defensive duties
in the United States, n by ex-Governor Henry M. Hoyt of Pennsyl-
vania (New York, 1886), is hardly below the average in this respect,
yet in the very preface the author discloses his equipment for eco-
nomic investigation by talking of value as though it were a measure
of quantity, and supposing the case of a farmer who has $3500 worth
of produce which he cannot sett or barter. With this beginning it is
hardly to be wondered at that the 420 pages of his work bring him
to the conclusion, which he prints in italics, that " the nearer we
come to organizing and conducting our competing industries as if
we were the only nation on the planet, the more we shall make and
the more we shall have to divide among the makers." An asteroid
of about the superficial area of Pennsylvania would doubtless seem
the most desirable of worlds to this protectionist statesman and
philosopher

242

THE REAL STRENGTH OF PROTECTION. 243

protection is advocated or defended, and this has been
necessary to onr inquiry, just as it is necessary that an ad-
vancing army should first take the outworks before it can
move on the citadel. Yet though these arguments are not
merely used controversially, but justify their faith in pro-
tection to protectionists themselves, the real strength of
protection must be sought elsewhere.

One needs but to talk with the rank and file of the sup-
porters of protection in such a way as to discover their
thoughts rather than their arguments, to see that beneath
all the reasons assigned for protection there is something
which gives it vitalitv. no matter how clearly those reasons
may be disproved.

The truth is, that the fallacies of protection draw their
real strength from a great fact, which is to them as the
earth was to the fabled Antaeus, so that they are beaten
down only to spring up again. This fact is one which
neither side in the controversy endeavors to explain
which free traders quietly ignore and protectionists quietly
utilize ; but which is of all social facts most obvious and
important to the working-classes the fact that as soon,
at least, as a certain stage of social development is reached,
there are more laborers seeking employment than can find
it a surplus which at recurring periods of industrial de-
pression becomes very large. Thus the opportunity of
work comes to be regarded as a privilege, and work itself
to be deemed in common thought a good.*

* The getting of work, not the getting of the results of work, is
assumed by protectionist writers to be the end at which a true
national policy should aim, though for obvious reasons they do not
dwell upon this notion. Thus, Professor Thompson says (p. 211,
"Political Economy") :

"The [free-trade] theory assumes that the chief end of national
as of individual economy is to save labor, whereas the great problem
is how to employ it productively. If buying in the cheapest market

244 PROTECTION OR FREE TRADE!

Here, and not in the labored arguments which its advo-
cates make or in the power of the special interests which
it enlists, lies the real strength of protection. Beneath all
the mental habits I have spoken of as disposing men to ac-
cept the fallacies of protection lies one still more impor-
tantthe habit ingrained in thought and speech of looking
upon work as a boon.

Protection, as we have seen, operates to reduce the
power of a community to obtain wealth to lessen the re-
sult which a given amount of exertion can secure. It
11 makes more work," in the sense in which Pharaoh made
more work for the Hebrew brickmakers when he refused
them straw ; in the sense in which the spilling of grease
over her floor makes more work for the housewife, or the
rain that wets his hay makes more work for the farmer.

Yet, when we prove this, what have we proved to men
whose greatest anxiety is to get work ; whose idea of good
times is that of times when work is plentiful!

A rain that wets his hay is to the farmer clearly an in-
jury ; but is it an injury to the laborer who gets by reason
of it a day's work and a day's pay that otherwise he would
not have got ?

The spilling of grease upon her kitchen floor may be a
bad thing for the housewife ; but to the scrubbing woman
who is thereby enabled to earn a needed half-dollar it may
be a godsend.

Or if the laborers on Pharaoh's public works had been
like the laborers on modern public works, anxious only
that the job might last, and if outside of them had been a
mass of less fortunate laborers, pressing, struggling, beg-

reduce the amount of employment, it will be, for the nation that does
it, the dearest of aU buying." Or, again (p. 235) : "The national
economy of labor consists, not in getting on with as little as possible,
but in finding remunerative employment for as much of it as pos-
sible/'

THE BBAL STRENGTH OP PROTECTION. 245

ging for employment in the brick-yards would the edict
that, by reducing the productiveness of labor, made more
work have really been unpopular?

Let us go back to Robinson Crusoe. In speaking of him
I purposely left out Friday. Our protectionist might have
talked until he was tired without convincing Crusoe that
the more he got and the less he gave in his exchange with
passing ships the worse off he would be. But if he had
taken Friday aside, recalled to his mind how Crusoe had
sold Xury into slavery as soon as he had no further use
for him, even though the poor boy had helped him escape
from the Moors and had saved his life, and then had
whispered into Friday's ear that the less work there was
to do the less need would Crusoe have of him and the
greater the danger that he might give him back to the
cannibals, now that he was certain to have more congenial
companions would the idea that there might be danger
in a deluge of cheap goods have seemed so ridiculous to
Friday as it did to Crusoe ?

Those who imagine that they can overcome the popular
leaning to protection by pointing out that protective tariffs
make necessary more work to obtain the same result,
ignore the fact that in all civilized countries that have
reached a certain stage of development the majority of the
people are unable to employ themselves, and, unless they
find some one to give them work, are helpless, and, hence,
are accustomed to regard work as a thing to be desired in
itself, and anything which makes more work as a bene-
fit, not an injury.

Here is the rock against which "free traders" whose
ideas of reform go no further than " a tariff for revenue
only n waste their strength when they demonstrate that the
effect of protection is to increase work without increasing
wealth. And here is the reason why, as we have seen in
the United States, in Canada and in Australia, the disposi-

246 PROTECTION OR FREE TRADE*

tion to resort to protective tariffs increases as that early
stage in which there is no difficulty of finding employment
is passed, and the social phenomena of older countries
begin to appear.*

There never yet lived a man who wanted work for its
own sake. Even the employments, constructive or destruc-
tive, as may be, in which we engage to exercise our facul-
ties or to dissipate mnui , must to please us show result. It
is not the mere work of felling trees that tempts Mr. Glad-
stone to take up his ax as a relief from the cares of state
and the strain of politics. He could get as much work-
in the sense of exertion from pounding a sand-bag with

* The growth of the protective spirit as social development goes on,
which has been very obvious in the United States, is generally
attributed to the influence of the manufacturing interests which
begin to arise. But observation has convinced me that this cause
is inadequate, and that the true explanation lies in habits of thought
engendered by the greater difficulties of finding employment. I am
satisfied, for instance, that protection is far stronger in California
than it was in the earlier days of that State. But the Calif ornian
industries that can be protected by a national tariff are yet insignifi-
cant as compared with industries that cannot be protected. But when
tramps abound and charity is invoked for relief works, one need
not go far to find an explanation of the growth of a sentiment which
favors the policy of "keeping work in the country." Nothing can
be clearer than that our protective tariff adds largely to the cost of
nearly everything that the American farmer has to buy, while adding
little, if anything, to the price of what he has to sell, and it has been
a favorite theory with those who since the war have been endeavor-
ing to arouse sentiment against protection that the attention of the
agricultural classes only needed to be called to this to bring out an
overwhelming opposition to protective duties. But with all the
admirable work that has been done in this direction, it is hard to
see any result. The truth is, as may be discovered by talking with
farmers, that the average farmer feels that "there are already too
many people in farming," and hence is not ill disposed toward a
policy which, though it may increase the prices he has to pay, claims
to "make work" in other branches of industry.

THE REAL STRENGTH OF PROTECTION. 247

A wooden mallet. But he could no more derive pleasure
from this than the man who enjoys a brisk walk could find
like enjoyment in tramping a treadmill. The pleasure is
in the sense of accomplishment that accompanies the work
in seeing the chips fly and the great tree bend and fall.

The natural inducement to the work by which human
wants are supplied is the produce of that work. But our
industrial organization is such that what large numbers of
men expect to get by work is not the produce or any pro-
portional share of the produce of their work, but a fixed
sum which is paid to them by those who take for their own
uses the produce of their work. This sum takes to them
the place of the natural inducement to work, and to obtain
it becomes the object of their work.

Now the very fact that without compulsion no one will
work unless he can get something for it, causes, in common
thought, the idea of wages to become involved in the idea
of work, and leads men to think and speak of wanting work
when what they really want are the wages that are to be
got by work. But the fact that these wages are based upon
the doing of work, not upon its productiveness, dissociates
the idea of return to the laborer from the idea of the actual
productiveness of his labor, throwing this latter idea into
the background or eliminating it altogether.

In our modern civilization the masses of men possess
only the power to labor. It is true that labor is the pro.
ducer of all wealth, in the sense of being the active factor
of production ; but it is useless without the no less neces-
sary passive factor. With nothing to exert itself upon,
labor can produce nothing, and is absolutely helpless.
And so, the men who have nothing but the power to labor
must, to make that power of any use to them, either hire
the material necessary to the exertion of labor, or, as is the
prevailing method in our industrial organization, sell their
labor to those who have the material. Thus it comes that

248 PROTECTION OB FREE TRADE t

the majority of men must find some one who will set them
to work and pay them wages, he keeping as his own what
their expenditure of labor produces.

We have seen how in the exchange of commodities
through the medium of money the idea arises, almost in*
sensibly, that the buyer confers an obligation upon the
seller. But this idea attaches to the buying and selling of
labor with greater clearness and far greater force than to
the buying and selling of commodities. There are several
reasons for this. Labor will not keep. The man who
does not sell a commodity to-day may sell it to-morrow.
At any rate he retains the commodity. But the labor of
the man who has stood idle to-day because no one would
hire him cannot be sold to-morrow. The opportunity has
gone from the man himself, and the labor that he might
have exerted, had he found a buyer for it, is utterly lost.
The men who have nothing but their labor afe, moreover,
the poorest class the class who live from hand to mouth
and who are least able to bear loss. Further than this, the
sellers of labor are numerous as compared with buyers.
All men in health have the power of labor, but under the
conditions which prevail in modern civilization only a
comparatively few have the means of employing labor,
and there are always, even in the best of times, some
men who find it difficult to sell their labor and who are
thus exposed to privation and anxiety, if not to physical
suffering.

Hence arises the feeling that the man who employs
another to work is a benefactor to him a feeling which
even the economists who have made war upon some of the
popular delusions growing out of it have done their best
to foster, by teaching that capital employs and maintains
labor. This feeling runs through all classes, and colors
all our thought and speech. One cannot read our news-
papers without seeing that the notice of a new building or

THE REAL STRENGTH OF PROTECTION. 249

projected enterprise of any kind usually concludes by stat-
ing that it will give employment to so many men, as
though the giving of employment, the providing of work,
were the measure of its public advantage, and something
for which all should be grateful. This feeling, strong
among employed, is stronger still among employers. The
rich manufacturer, or iron-worker, or ship-builder, talks
and thinks of the men to whom he has "given employ-
ment n as though he had actually given something which
entitled him to their gratitude, and he is inclined to think,
and in most cases does think, that in combining to demand
higher wages or less hours, or in any way endeavoring to
put themselves in the position of freely contracting parties,
they are snapping at the hand that has fed them, although
the obvious fact is that such an employer's men have given
him a greater value than he has given them, else he could
not have grown rich by employing them.

This habit of looking on the giving of employment as a
benefaction and on work as a boon, lends easy currency
to teachings which assume that work is desirable in itself
something which each nation ought to try to get the
most of 'and makes a system which professes to prevent
other countries from doing for us work we might do for
ourselves seem like a system for the enrichment of our
own country and the benefit of its working-classes. It not
only indisposes men to grasp the truth that protection can
operate only to reduce the productiveness of labor ; but it
indisposes them to care anything about that. It is the need
for labor, not the productiveness of labor, that they ara
accustomed to look upon as the thing to be desired.

Bo confirmed is this habit, that nothing is more common
than to hear it said of a useless construction or expendi-
ture that "it has done no good, except to provide employ-
ment," while the most popular argument for the eight-hour
system is that machinery has so reduced the amount of

250 PROTECTION OB FREE TRADE!

work to be done that there is not now enough to go around
unless divided into smaller " takes/'

When men are thus accustomed to think and speak of
work as desirable in itself, is it any wonder that a system
which proposes to "make work" should easily obtain
popularity?

Protectionism viewed in itself is absurd. But it is no
more absurd than many other popular beliefs. Professor
W. G. Sumner of Yale College, a fair representative of the
so-called free traders who have been vainly trying to
weaken the hold of protectionism in the United States
without disturbing its root, essayed, before the United
States Tariff Commission in 1882, to bring protectionism
to a reductio ad absurdum by declaring that the protection-
ist theory involved such propositions as these : that a big
standing army would tend to raise wages by withdrawing
men from competition in the labor-market ; that paupers
in almshouses and convicts in prisons ought for the same
reason to be maintained without labor ; that it is better for
the laboring-class that rich people should live in idleness
than that they should work; that trades-unions should
prevent their members from lessening the supply of work
by doing too much ; and that the destruction of property
in riots must be a good thing for the laboring-class, by in-
creasing the work to be done.

But whoever will listen to the ordinary talk of men and
read the daily newspapers, will find that, so far from such
notions seeming absurd to the common mind, they are ac-
customed ideas. Is it not true that the "good times dur-
ing the war" are widely attributed to the "employment
furnished by government " in calling so many men into the
army, and to the brisk demand for commodities caused by
their unproductive consumption and by actual destruction f
Is it not true that all over the United States the working-
classes are protesting against the employment of convicts

THE EEAL STRENGTH OF PROTECTION. 251

in this, that or the other way, and would much rather have
them kept in idleness than have them " take work from
honest men w ? Is it not true that the rich man who " gives
employment" to others by his lavish waste is universally
regarded as a better friend to the workers than the rich
man who " takes work from those who need it " by doing
it himself?

In themselves these notions may be what the Professor
declares them, " miserable fallacies which sin against com-
mon sense," but they arise from the recognition of actual
facts. Take the most preposterous of them. The burning
down of a city is indeed a lessening of the aggregate
wealth. But is the waste involved in the burning down
of a city any more real than the waste involved in the
standing idle of men who would gladly be at work in
building up a city ? Where every one who needed to work
could find opportunity, there it would indeed be clear that
the maintenance in idleness of convicts, paupers or rich
men must lessen the rewards of workers ; but where hun-
dreds of thousands must endure privation because of their
inability to find work, the doing of work by those who can
support themselves, or will be supported without it, seems
like taking the opportunity to work from those who most
need or most deserve it. Such " miserable fallacies * must
continue to sway men's minds until some satisfactory ex-
planation is afforded of the facts that make the "leave to
toil " a boon. To attempt, as do " free traders " of Profes-
sor Sumner's class, to eradicate protectionist ideas while
ignoring these facts, is utterly hopeless. What they take
for a seedling that may be pulled up with a vigorous effort,
is in reality the shoot of a tree whose spreading roots reach
to the bed-rock of society. A political economy that will
recognize no deeper social wrong than the framing of
tariffs on a protective instead of on a revenue basis, and
that, with such trivial exceptions; is but a justification of

252 PROTECTION OB FREE TRADE?

" things as they are," is repellent to the instincts of the
masses. To tell working-men, as Professor Sumner does,
that " trades-unionism and protectionism are falsehoods/'
is simply to dispose them to protectionism, for whatever
may be said of protection they well know that trades-unions
have raised wages in many vocations, and that they are the
only things that have yet given the working-classes any
power of resisting a strain of competition that, unchecked,
must force them to the maximum of toil for the minimum
of pay. Such free-tradeism as Professor Sumner repre-
sentsand it is this that is taught in England, and that in
the United States has essayed to do battle with protection-
ismmust, wherever the working-classes have political
power, give to protection positive strength.

But it is not merely by indirection that what is known
as the "orthodox political economy" strengthens protec-
tion. While condemning protective tariffs it has justified
revenue tariffs, and its most important teachings have not
merely barred the way to such an explanation of social
phenomena as would cut the ground from under protec-
tionism, but have been directly calculated to strengthen
the beliefs which render protection plausible. The teach-
ing that labor depends for employment upon capital, and
that wages are drawn from capital and are determined by
the ratio between the number of laborers and the amount
of capital devoted to their employment j all the teachings,
in short, which have degraded labor to the position of a
secondary and dependent factor in production, have tended
to sanction that view of things which disposes the labor-
ing-class to look with favor upon anything which, by pre-
venting the coming into a country of the produce of other
countries, seems, at least, to increase the requirement for
work at home.

CHAPTER XXTV.

THE PARADOX.

IF our investigation has as yet led to no satisfactory
conclusion it has at least explained why the controversy
so long carried on between protectionists and free traders
has been so indeterminate. The paradox we have reached
is one toward which all the social problems of our day con-
verge, and had our examination been of any similar ques-
tion it must have come to just such a point.

Take, for instance, the question of the effects of machi-
nery. The opinion that finds most influential expression is
that labor-saving invention, although it may sometimes
cause temporary inconvenience or even hardship to a few,
is ultimately beneficial to all. On the other hand, there is
among working-men a wide-spread belief that labor-saving
machinery is injurious to them, although, since the belief
does not enlist those powerful special interests that are
concerned in the advocacy of protection, it has not been
wrought into an elaborate system and does not get any-
thing like the same representation in the organs of public
opinion.

Now, should we subject this question to such an exami
nation as we have given to the tariff question we should
reach similar results. We should find the notion that
invention ought to be restrained as incongruous as the
notion that trade ought to be restrained as incapable of

253

254 PROTECTION OE FREE TRADE!

being carried to its logical conclusions without resulting
in absurdity. And while the use of machinery enormously
increases the production of wealth, examination would
show in it nothing to cause inequality in distribution.
On the contrary, we should see that the increased power
given by invention inures primarily to labor, and that this
gain is so diffused by exchange that the effect of an
improvement which increases the power of labor in one
branch of industry must be shared by labor in all other
branches. Thus the direct tendency of labor-saving
improvement is to augment the earnings of labor. Nor is
this tendency neutralized by the fact that labor-saving
inventions generally require the use of capital, since compe-
tition, when free to act, must at length bring the profits of
capital used in this way to the common level. Even the
monopoly of a labor-saving invention, while it can seldom
be maintained for any length of time, cannot prevent a
large (and generally much the largest) part of the benefits
from being diffused.*

Prom this we might conclude with certainty, that the
tendency of labor-saving improvements is to benefit all,
and especially to benefit the working-class, and hence
might naturally attribute any distrust of their beneficial
effects partly to the temporary displacements which, in
a highly organized society, any change in the forms of
industry must cause, and partly to the increased wants
called forth by the increased ability to satisfy want.

Yet, while as a matter of theory it is clear that labor-
saving inventions ought to improve the condition of all ;
as a matter of fact it is equally clear that they do not.

In countries like Great Britain there is still a large
class living on the verge of starvation, and constantly

* For a fuller examination of the effects of machinery see my
"Social Problems."

THE PARADOX. 266

slipping over it a class who have not derived the slight-
est benefit from the immense increase of productive
power, since their condition never could have been any
worse than it is a class whose habitual condition in
times of peace and plenty is lower, harder, more pre-
carious and more degraded than that of any savages.

In countries like the United States, where such a class
did not previously exist, its development has been con-
temporaneous with wondrous advances of labor-saving
invention. The laws against tramps which have been
placed upon the statute-books of our States, the restric-
tions upon child labor which have been found necessary,
the walking advertisements of our cities, the growing
bitterness of the strife which working-men are forced to
wage, indicate unmistakably that while discovery and
invention have been steadily increasing the productive
power of labor in every department of industry, the con-
dition of the mere laborer has been growing worse.

It can be proved that labor-saving invention tends to
benefit labor, but that this tendency is in some way
aborted is even more clearly evident in the facts of
to-day than it was when John Stuart Mill questioned if
mechanical invention had lightened the day's toil of any
human being. That in some places and in some occu-
pations there has been improvement in the condition of
labor is true. But not only is such improvement
nowhere commensurate with the increase of productive
power ; it is clearly not due to it. It exists only where it
has been won by combinations of workmen or by legal
interference. It is trades-unions, not the increased power
given by machinery, that have in many occupations in
Great Britain reduced hours and increased pay; it is
legislation, not any improvement in the general condi-
tion of labor, that has stopped the harnessing of women
in mines and the working of little children in mills and

266 PROTECTION OB FREE TRADEt

brick-yards. Where such influences have not been felt, it
is not only certain that labor-saving inventions have not
improved the condition of labor, but it seems as if they
had exerted a depressing effect operating to make labor
a drug instead of to make it more valuable.

Thus, in relation to the effects of machinery, as in
relation to the effects of tariffs, there are two sides to the
shield. Conclusions to which we are led by a considera-
tion of principles are contradicted by conclusions we are
compelled to draw from existing facts. But, while dis-
cussion may go on interminably between those who,
looking only at one side of the shield, refuse to consider
what their opponents see, yet to recognize the contradic-
tory aspects of such a question is to realize the possibility
of an explanation that will include both.

The problem we must solve to explain why free trade
or labor-saving invention or any similar cause fails to
produce the general benefits we naturally expect, is a
problem of the distribution of wealth. When increased
production of wealth does not proportionately benefit the
working-classes, it must be that it is accompanied by
increased inequality of distribution.

In themselves free trade and labor-saving inventions
do not tend to inequality of distribution. Yet it is pos-
sible that they may promote such inequality, not by
virtue of anything inherent in their tendencies, but
through their effect in increasing production, for, as
already pbinted out, increase or decrease in the pro-
duction of wealth may of itself, under certain circum-
tances, alter the proportions of distribution. Let me illus-
trate :

Smith, a plumber, and Jones, a gas-fitter, form a part-
nership in the usual way, and go into the business of
plumbing and gas-fitting. In this case whatever in-
creases or decreases the profits of the firm will affect the

THE PARADOX. 25?

partners equally, and whether these profits be much or
little, the proportion which each takes will be the same.

But let us suppose their agreement to be of a kind
occasionally made, that the plumber shall have two-thirds
of the profits on all plumbing done by the firm, and the
gas-fitter two-thirds of the profits on all gas-fitting. In
such case, every job they do will not only increase or
decrease the profits of the firm, but, according as it is a
job of plumbing or of gas-fitting, will directly affect the
distribution of profits between the partners.

Or, again, let us suppose that the partners differ in
their ability to take risks. Smith has a family and must
have a steady income, while Jones is a bachelor who
could get along for some time without drawing from
the firm. Better to assure Smith of a living, it is agreed
that he shall draw a fixed sum before any profits are
distributed, and, in return for this guaranty, shall get
only a quarter of the profits remaining. In such a case,
increase or decrease of profits would of itself alter the
proportions of distribution. Increase of profits would
affect distribution in favor of Jones, and might go so far
as to raise his share to nearly 75 per cent, and reduce
the share of Smith to little over 25 per cent. Decrease
of profits on the other hand would affect distribution in
favor of Smith, and might go so far as to give him 100
per cent., while reducing Jones's share to nothing. In
such a case as this, any circumstance which affected the
amount of profits would affect the terms of distribution,
but not by virtue of anything peculiar to the circum-
stance. Its real cause would be something external to,
and unconnected with, such circumstance.

The social phenomena we have to explain resemble
those presented in this last case. The increased in-
equality of distribution which accompanies material
progress is evidently connected with the increased pro-

258 PROTECTION OR FREE TRADE?

duction of wealth, and does not arise from any direct
effect of the causes which increase wealth.

Our illustration, however, yet lacks something. In the
case we have supposed, increase of their joint profits
would benefit both partners, though in different degrees.
Even when Smith's share diminished in proportion, it
would increase in amount. But in the social phenomena
we are considering, it is not merely that with increasing
wealth the share that some classes obtain is not increased
proportionately j it is that it is not increased absolutely,
and that in some cases it is even absolutely, as well as
proportionately, diminished.

To get an illustration that will cover this point as well,
let us therefore take another case. Let us go back to
Robinson Crusoe's island, which may well serve us as an
example of society in its simplest and therefore most
intelligible form.

The discovery of the island which we have heretofore
supposed, involving calls by other ships, would greatly
increase the wealth which the labor of its population of
two could obtain. But it would not follow that in the
increased wealth both would gain. Friday was Crusoe's
slave, and no matter how much the opening of trade with
the rest of the world might increase wealth, he could
demand only the wages of a slave enough to maintain
him in working ability. So long as Crusoe himself lived
he would doubtless take good care of the companion of
his solitude, but when in the course of time the island
had fully come into the circle of civilized life, and had
passed into the possession of some heir of Crusoe's, or of
some purchaser, living probably in England, and was
cultivated with a view to making it yield the largest
income, the gulf between the proprietor who owned it
and the slave who worked upon it would not merely have
enormously widened as compared with the time when

THE PARADOX. 259

Crusoe and Friday shared with substantial equality the
joint produce of their labor, but the share of the slave
might have become absolutely less, and his condition
lower and harder.

It is not necessary to suppose positive cruelty or
wanton harshness. The slaves who in the new order of
things took Friday's place might have all their animal
wants suppliedthey migh v , have as much to eat as
Friday had, might wear better clothes, be lodged in
better houses, be exempt from the fear of cannibals, and
in illness have the attendance of a skilled physician.
And seeing this, island " statisticians n might collate
figures or devise diagrams to show how much better off
these toilers were than their predecessor, who wore
goatskins, slept in a cave and lived in constant dread of
being eaten, and the conclusions of these gentlemen
might be paraded in all the island newspapers, with a
chorus of : " Behold, in figures that cannot lie and dia-
grams that can be measured, how industrial progress
benefits everybody, even the slave ! n

But in things of which the statistician takes no account
they would be worse off than Friday. Compelled to a
round of dreary toil, unlightened by variety, undignified
by responsibility, unstimulated by seeing results and par-
taking of them, their life, as compared with that of Friday,
would be less that of men and more that of machines.

And the effect of such changes would be the same
upon laborers such as we call freefree, that is to say,
to use their own power to labor, but not free to that
which is necessary to its use. If Friday, instead of set-
ting Crusoe's foot upon his head, in token that he was
thenceforward his slave, had simply acknowledged
Crusoe's ownership of the island, what would have been
the difference? As he could live upon Crusoe's prop-
erty only on Crusoe's terms, his freedom would simply

260 PROTECTION OR TREE TRADET

have amounted to the freedom to emigrate, to drown
himself in the sea, or to give himself up to the cannibals.
Men enjoying only such freedom that is to say, the
freedom to starve or emigrate as the alternative of get-
ting some one else's permission to labor cannot be
enriched by improvements that increase the production
of wealth. For they have no more power to claim any
share of it than has the slave. Those who want them to
work must give them what the master must give the
slave if he wants him to work enough to support life
and strength ; but when they can find no one who wants
them to work they must starve, if they cannot beg.
Grant to Crusoe ownership of the island, and Friday, the
free man, would be as much subject to his will as Friday,
the slave; as incapable of claiming any share of an
increased production of wealth, no matter how great it
might be nor from what cause it might come.

And what would be true in the case of one man would
be true of any number. Suppose ten thousand Fridays,
all free men, all absolute owners of themselves, and but
one Crusoe, the absolute owner of the island. So long
as his ownership was acknowledged and could be
enforced, would not the one be the master of the ten
thousand as fully as though he were the legal owner ol
their flesh and blood ? Since no one could use Ms island
without his consent, it would follow that no one could
labor, or even live, without his permission. The order,
"Leave my property," would be a sentence of death
This owner of the island would be to the other ten thou-
sand " free men " who lived upon it, their land lord or
land god, of whom they would stand in more real awe
than of any deity that their religion taught them reigned
above. For as a Scottish landlord told his tenants:
" God Almighty may have made the land, but I own it
And if you don't do as I say, off you go ! "

THE PARADOX. 261

No increase of wealth could enable such "free*
laborers to claim more than a bare living. The opening
up of foreign trade, the invention of labor-saving
machines, the discovery of mineral deposits, the intro-
duction of more prolific plants, the growth of skill,
would simply increase the amount their land lord would
charge for the privilege of living on his island, and could
in no wise increase what those who had nothing but their
labor could demand. If Heaven itself rained down
wealth upon the island that wealth would be his. And
so, too, any economy that might enable these mere
laborers to live more cheaply would simply increase the
tribute that they could pay and that he could exact.

Of course, no man could utilize a power like this to
its full extent or for himself alone. A single landlord in
the midst of ten thousand poor tenants, like a single
master amid ten thousand slaves, would be as lonely as
was Robinson Crusoe before Friday came. The human
being is by nature a social animal, and no matter how
selfish such a man might be, he would desire companions
nearer his. own condition. Natural impulse would
prompt him to reward those who pleased him, prudence
would urge him to interest the more influential among
iis ten thousand Fridays in the maintenance of his
ownership, while experience would show him, if calcula-
tion did not, that a larger income could be obtained by
leaving to superior energy, skill and thrift some part of
what their efforts secured. But while the single owner
of such an island would thus be induced to share his
privileges by means of grants, leases, exemptions or
stipends, with a class more or less numerous, who would
thus partake with him in the advantages of any improve-
ment that increased the power of producing wealth, there
would yet remain a class, the mere laborers of only ordi-
nary ability, to whom such improvement could bring no

282 PROTECTION OR FREE TRADE!

benefit. And it would only be necessary to be a little
chary in granting permission to work upon the island, so
as to keep a small percentage of the population con-
stantly on the verge of starvation and begging to be
permitted to use their power to labor, to create a com-
petition in which, bidding against each other, men would
of themselves offer all that their labor could procure
save a bare living, for the privilege of getting that.

We can sometimes see principles all the clearer if we
imagine them brought out under circumstances to which
we are not habituated ; but, as a matter of fact, the social
adjustment which in modern civilization creates a class
who can neither labor nor live save by permission of
others, never could have arisen in this way.

The reader of " The Further Adventures of Eobinson
Crusoe," as related by De Foe, will remember that during
Crusoe's long absence, the three English rogues, led by
Will Atkins, set up a claim to the ownership of the
island, declaring that it had been given to them by
Robinson Crusoe, and demanding that the rest of the
inhabitants should work for them by way of rent.
Though used in their own countries to the acknowledg-
ment of just such claims, set up in the name of men
gone, not to other lands, but to another world, the Span-
iards, as well as the peaceable Englishmen, laughed at
this demand, and, when it was insisted on, laid Will
AJJdns and his companions by the heels until they had
got over the notion that other people should do their
work for them. But if the three English rogues had got
possession of all the firearms before asserting their claim
to own the island, the rest of its population might have
been compelled to acknowledge it. Thus a class of
landowners and a class of non-landowners would have
been established, to which arrangement the whole popu-
lation might in a few generations have become so habitu-

THE PABADOX. 263

ated as to think it the natural order, and when they had
begun, in course of time, to colonize other islands, they
would have established the same institution there. Now,
what might thus have happened on Crusoe's island, had
the three English rogues got possession of all the fire-
arms, is precisely what on a larger scale, did happen in
the development of European civilization, and what is
happening in its extension to other parts of the world.
Thus it is that we find in civilized countries a large class
who, while they have power to labor, are denied any
right to the use of the elements necessary to make that
power available, and who, to obtain the use of those
elements, must either give up in rent a part of the prod-
uce of their labor, or take in wages less than their labor
yields. A class thus helpless can gain nothing from
advance in productive power. Where such a class exists,
increase in the general wealth can only mean increased
inequality in distribution. And though this tendency
may be a little checked as to some of them by tradesx
unions or similar combinations which artificially lessen
competitipn, it will operate to the full upon those outside
of such combinations.

And, let me repeat it, this increased inequality in dis-
tribution does not mean merely that the mass of those
who have nothing but the power to labor do not propor-
tionately share in the increase of wealth. It means that
their condition must become absolutely, as well as
relatively, worse. It is in the nature of industrial
advance it is of the very essence of those prodigious
forces which modern invention and discovery are unloos-
ing, that they must injure where they do not benefit.
These forces are not in themselves either good or evil.
They bring good or evil according to the conditions
under which they are exerted. In a state of society in
which all men stood upon an equality with relation to the

264 PROTECTION OB FREE TRADEt

use of the material universe their effects could be only
beneficent. But in a state of society in which some men
are held to be the absolute owners of the material uni-
verse, while other men cannot use it without paying
tribute, the blessing these forces might bring is changed
into a curse their tendency is to destroy independence,
to dispense with skill and convert the artisan into a
"hand," to concentrate all business and make it harder
for an employee to become his own employer, and to
compel women and children to injurious and stunting
toil. The change industrial progress is now working in
the conditions of the mere laborer, and which is only
somewhat held in check by the operations of trades-
unions, is that change which would convert a slave who
shared the varied occupations and rude comforts of his
goatskin-clothed master into a slave held as a mere
instrument of factory production. Compare the skilled
craftsman of the old order with the operative of the new
order, the mere feeder of a machine. Compare the
American farm "help" of an earlier state, the social
equal of his employer, with the cow-boy, whose dreary
life is enlivened only by a "round-up" or "drunk," or
with the harvest hand of the " wheat factory," who sleeps
in barracks or barns, and after a few months of employ-
ment goes on a tramp. Or compare the poverty of
Connemara or Skye with the infinitely more degraded
poverty of Belfast or Glasgow. Do this, and then say
if to those who can hope to sell their labor only for a
subsistence, our very industrial progress has not a dark
side.

And that this must be the tendency of labor-saving
invention or reform in a society where the planet is held
to be private property, and the children that come into
life upon it are denied all right to its use except as they
buy or inherit the title of some dead man, we may see

THE PARADOX. 265

plainly if we imagine labor-saving invention carried to
its furthest imaginable extent. When we consider that
the object of work is to satisfy want, the idea that labor-
saving invention can ever cause want by making work
more productive seems preposterous. Yet, could inven-
tion go so far as to make it possible to produce wealth
without labor, what would be the effect upon a class who
can call nothing their own, save the power to labor, and
who, let wealth be never so abundant, can get no share
of it except by selling this power ? Would it not be to
reduce to naught the value of what this class have to
sell ; to make them paupers in the midst of all possible
wealth to deprive them of the means of earning even a
poor livelihood, and to compel them to beg or starve, if
they could not steal? Such a point it may be impossible
for invention ever to reach, but it is a point toward
which modern invention drives. And is there not in
this some explanation of the vast army of tramps and
paupers, and of deaths by want and starvation in the
very midst of plenty ?

The abolition of protection would tend to increase the
production of wealth that is sure. But under condi-
tions that exist, increase in the production of wealth may
itself become a cursefirst to the laboring-class, and
ultimately to society at large.

Is it not true, then, it may be asked, that protection,
for the reason at least that it does check that freedom
and extension of trade which are essential to the full
play of modern industrial tendencies, is favorable to the
working-classes? Much of the strength of protection
among working-men comes, I think, from vague feelings
of this kind.

My reply would be negative. Not only has protection
which is merely the protection of producing capitalists
against foreign competition in the home market ten-

286 PROTECTION OB FREE TRADE!

dencies in itself toward monopoly and inequality, but it
is impotent to check the concentrating tendencies of
modern inventions and processes. To do this by " pro-
tection * we must not only forbid foreign commerce, but
restrain internal commerce. We must not only prohibit
any new applications of labor-saving invention, but must
prevent the use of the most important of those already
adopted. We must tear up the railway and go back to
the canal-boat and freight-wagon; cut down the tele-
graph-wire and rely upon the post-horse ; substitute the
scythe for the reaper, the needle for the sewing-machine,
the hand-loom for the factory; in short, discard all that
a century of invention has given us, and return to the
industrial processes of a hundred years ago. This is as
impossible as for the chicken to go back to the egg. A
man may become decrepit and childish, but once man-
hood is reached he cannot again become a child.

No ; it is not in going backward, it is in going forward,
that the hope of social improvement lies.

CHAPTER XXV.

THE BOBBER THAT TAKES ALL THAT IS LEFT.

IN itself the abolition of protection is like the driving
off of a robber.

But it will not help a man to drive off one robber, if
another, still stronger and more rapacious, be left to
plunder him.

Labor may be likened to a man who as he carries
home his earnings is waylaid by a series of robbers.
One demands this much, and another that much, but last
of all stands one who demands all that is left, save just
enough to enable the victim to maintain life and come
forth next day to work. So long as this last robber
remains, what will it benefit such a man to drive off any
or all of the other robbers ?

Such is the situation of labor to-day throughout the
civilized world. And the robber that takes all that is
left, is private property in land. Improvement, no
matter how great, and reform, no matter how beneficial
in itself, cannot help that class who, deprived of all right
to the use of the material elements, have only the power
to labor a power as useless in itself as a pail without
wind, a pump without water, or a saddle without a horse.

I have likened labor to a man beset by a series of
robbers, because there are in every country other things
than private property in land which tend to diminish

267

268 PROTECTION OB FREE TRADE?

national prosperity and divert the wealth earned by
labor into the hands of non-producers. This is the ten-
dency of monopoly of the processes and machinery of
production and exchange, the tendency of protective
tariffs, of bad systems of currency and finance, of cor-
rupt government, of public debts, of standing armies,
and of wars and preparations for war. But these things,
some of which are conspicuous in one country and some
in another, cannot account for that impoverishment of
labor which is to be seen everywhere. They are the
lesser robbers, and to drive them off is only to leave
more for the great robber to take.

If the all-sufficient cause of the impoverishment of
labor were abolished, then reform in any of these direc-
tions would improve the condition of labor 5 but so long
as that cause exists, no reform can effect any permanent
improvement. Public debts might be abolished, stand-
ing armies disbanded, war and the thought of war forgot-
ten, protective tariffs everywhere discarded, government
administered with the greatest purity and economy, and
all monopolies, save the monopoly of land, destroyed,
without any permanent improvement in the condition of
the laboring-class. For the economic effect of all these
reforms would simply be to diminish the waste or
increase the production of wealth, and so long as com-
petition for employment on the part of men who are
powerless to employ themselves tends steadily to force
wages to the minimum that give| the laborer but a bare
living, this is all the ordinary laborer can get. So long
as this tendency exists and it must continue to exist so
long as private property in land exists improvement
(even if possible) in the personal qualities of the laboring
masses, such as improvement in skill, in intelligence, in
temperance or in thrift, cannot improve their material
condition. Improvement of this kind can benefit the

THE BOBBER THAT TAKES ALL THAT IS LEFT. 269

individual only while it is confined to the individual, and
thus gives him an advantage over the body of ordinary
laborers whose wages form the regulative basis of all
other wages. If such personal improvements become
general the effect can only be to enable competition to
force wages to a lower level. Where few can read and
write, the ability to do so confers a special advantage
and raises the individual who possesses it above the level
of ordinary labor, enabling him to command the wages
of special skill. But where all can read and write, the
mere possession of this ability cannot save ordinary
laborers from being forced to as low a position as though
they could not read and write.

And so, where thriftlessness or intemperance prevails,
the thrifty or temperate have a special advantage which
may raise them above the conditions of ordinary labor j
but should these virtues become general that advantage
would cease. Let the great body of working-men so
reform or so degrade their habits that it would become
possible to live on one-half the lowest wages now paid,
and that competition for employment which drives men
to work for a bare living must proportionately reduce
the level of wages.

I do not say that reforms that increase the intelligence
or improve the habits of the masses are even in this view
useless. The diffusion of intelligence tends to make men
discontented with a life of poverty in the midst of wealth,
and the diminution of intemperance better fits them to
revolt against such a lot. Public schools and temperance
societies are thus prerevolutionary agencies. But they
can never abolish poverty so long as land continues to
be treated as private property. The worthy people who
imagine that compulsory education or the prohibition of
the drink traffic can abolish poverty are making the
same mistake that the Anti-Corn-Law reformers made

270 PBOTECTION OB FREE TRADE T

when they imagined that the abolition of protection
would make hunger impossible. Such reforms are in
their own nature good and beneficial, but in a world like
this, tenanted by beings like ourselves, and treated by
them as the exclusive property of a part of their number,
there must, under any conceivable conditions, be a class
on the verge of starvation.

This necessity inheres in the nature of things ; it arises
from the relation between man and the external uni-
verse. Land is the superficies of the globe that bottom
of the ocean of air to which our physical structure con-
fines us. It is our only possible standing-place, our only
possible workshop, the only reservoir from which we can
draw material for the supply of our needs. Considering
land in its narrow sense, as distinguished from water
and air, it is still the element necessary to our use of the
other elements. Without land man could not even avail
himself of the light and heat of the sun or utilize the
forces that pulse through matter. And whatever be his
essence, man, in his physical constitution, is but a chang-
ing form of matter, a passing mode of motion, con-
stantly drawn from nature's reservoirs and as constantly
returning to them again. In physical structure and
powers he is related to land as the fountain-jet is related
to the stream, or the flame of a gas-burner to the gas
that feeds it.

Hence, let other conditions be what they may, the man
who, if he lives and works at all, must live and work on
land belonging to another, is necessarily a slave or a
pauper.

There are two forms of slavery that which Friday
accepted when he placed Crusoe's foot upon his head,
and that which Will Atkins and his comrades attempted
to establish when they set up a claim to the ownership of
the island and called on its other inhabitants to do all

THE BOBBER THAT TAKES ALL THAT IS LEFT. 271

the work. The one, which consists in making property
of man, is resorted to only when population is too sparse
to make practicable the other, which consists in making
property of land.

For while population is sparse and unoccupied land is
plenty, laborers are able to escape the necessity of buying
the use of land, or can obtain it on nominal terms.
Hence to obtain slaves people who will work for you
without your working for them in return it is necessary
to make property of their bodies or to resort to predial
slavery or serfdom, which is an artificial anticipation of
the power that comes to the landowner with denser
population, and which consists in confining laborers to
land on which it is desired to utilize their labor. But
as population becomes denser and land more fully
occupied, the competition of non-landowners for the use
of land obviates the necessity of making property of
their bodies or of confining them to an estate in order to
obtain their labor without return. They themselves will
beg the privilege of giving their labor in return for
being permitted what must be yielded to the slave a
spot to live on and enough of the produce of their own
labor to maintain life.

This, for the owner, is much the more convenient form
of slavery. He does not have to worry about his slaves
is not at the trouble of whipping them to make them
work, or chaining them to prevent their escape, or chas-
ing them with bloodhounds when they run away. He is
not concerned with seeing that they are properly fed in
infancy, cared for in sickness or supported in old age.
He can let them live in hovels, let them work harder and
fare worse, than could any half-humane owner of the
bodies of men, and this without a qualm of conscience
or any reprobation from public opinion. In short, when
society reaches the point of development where a brisk

272 PROTECTION OR FREE TRADE?

competition for the use of land springs up, the owner-
ship of land gives more profit with less risk and trouble
than does the ownership of men. If the two young Eng-
lishmen I have spoken of had come over here and bought
so many American citizens, they could not have got from
them so much of the produce of labor as they now get by
having bought land which American citizens are glad to
be allowed to till for half the crop. And so, even if our
laws permitted, it would be foolish for an English duke
or marquis to come over here and contract for ten thou-
sand American babies, born or to be born, in the expec-
tation that when able to work he could get out of them
a large return. For by purchasing or fencing in a
million acres of land that cannot run away and do not
need to be fed, clothed or educated, he can, in twenty or
thirty years, have ten thousand full-grown Americans,
ready to give him half of all that their labor can produce
on his land for the privilege of supporting themselves and
their families out of the other half. This gives him
more of the produce of labor than he could exact from
so many chattel slaves. And as time goes on and Ameri-
can citizens become more plentiful, the ownership of this
land will enable him to get more of them to work for
him, and on lower terms. His speculation in land is as
much a speculation in the growth of men as though he
had bought children and contracted for infants yet to be
born. For if infants ceased to be born and men to grow
up in America, his land would be valueless. The profits
on such investment do not arise from the growth of
land or increase of its capabilities, but from growth of
population.

Land in itself has no value. Value arises only from
human labor. It is not until the ownership of land
becomes equivalent to the ownership of laborers that
any value attaches to it. And where land has a specula-

THE ROBBER THAT TAKES ALL THAT IS LEFT. 273

tive value it is because of the expectation that the growth
of society will in the future make its ownership equiva-
lent to the ownership of laborers.

It is true that all valuable things have the quality of
enabling their owner to obtain labor or the produce of
labor in return for them or for their use. But with
things that are themselves the produce of labor such
transactions involve an exchange the giving of an
equivalent of labor-produce in return for labor or its
produce. Land, however, is not the produce of labor;
it existed before man was, and, therefore, when the
ownership of land can command labor or the products
of labor, the transaction, though in form it may be an
exchange, is in reality an appropriation. The power
which the ownership of valuable land gives, is that of
getting human service without giving human service, a
power essentially the same as that power of appropria-
tion which resides in the ownership of slaves. It is not
a power of exchange, but a power of blackmail, such as
would be asserted were some men compelled to pay
other men for the use of the ocean, the air or the sun-
light.

The value of such things as grain, cattle, ships, houses,
goods or metals is a value of exchange, based upon the
cost of production, and therefore tends to diminish as
the progress of society lessens the amount of labor neces-
sary to produce such things. But the value of land is a
value of appropriation, based upon the amount that can
be appropriated, and therefore tends to increase as the
progress of society increases production. Thus it is, as
we see, that while all sorts of products steadily fall in
value, the value of land steadily rises. Inventions and
discoveries that increase the productive power of labor
lessen the value of the things that require labor for their
production, but increase the value of land, since they

274 PROTECTION OB FREE TRADE?

increase the amount that labor can be compelled to give
for its use. And so, where land is fully appropriated as
private property no increase in the production of wealth,
no economy in its use, can give the mere laborer more
than the wages of the slave. If wealth rained down
from heaven or welled up from the depths of the earth
it could not enrich the laborer. It could merely increase
the value of land.

Nor do we have to appeal to the imagination to see
this. In Western Pennsylvania it has recently been
discovered that if borings are made into the earth com-
bustible gas will force itself up a sheer donation, as it
were, by Nature, of a thing that heretofore could be pro-
duced only by labor. The direct and natural tendency of
this new power of obtaining by boring and piping what
has heretofore required the mining and retorting of coal
is to make labor more valuable and to increase the earn-
ings of the laborer. But land in Pennsylvania being
treated as private property, it can have no such effect.
Its effect, in the first place, is to enrich the owners of the
land through which the borings must be made, who, as
legal owners of the whole material universe above and
below their land, can levy a toll on the use of Natures'
gift. In the next place, the capitalists who have gone
into the business of bringing the gas in pipes to Pitts-
burgh and other cities have formed a combination similar
to that of the Standard Oil Company, by which they con-
trol the sale of the natural gas, and thus over and above
the usual returns of capital make a large profit. Still,
however, a residue of advantage is left, for the new fuel
is so much more easily handled, and produces so much
more uniform a heat, that the glass- and iron-workers of
Pittsburgh find it more economical than the old fuel,
even at the same cost. But they cannot long retain this
advantage. If it prove permanent, other glass- and iron.

THE ROBBER THAT TAKES ALL THAT IS LEFT. 276

workers will soon be crowding to Pittsburgh to share in
it, and the result will be that the value of city lots in
Pittsburgh will so increase as finally to transfer this
residual advantage to the owners of Pittsburgh land.*
And if the monopoly of the piping company is abolished,
or if by legislative regulation its profits are reduced to
the ordinary earnings of capital, the ultimate result will,
in the same way, be not an advantage to workers, but an
advantage to landowners.

Thus it is that railways cheapen transportation only to
increase the value of land, not the value of labor, and
that when their rates are reduced it is landowners not
laborers who get the benefit. So it is with all improve-
ments of whatever nature. The Federal Government has
acted the part of a munificent patron to Washington
City. The consequence is that the value of lots has
advanced. If the Federal Government were to supply
every Washington householder with free light, free fuel
and free food, the value of lots would still further
increase, and the owners of Washington "real estate "
would ultimately pocket the donation.

The primary factors of production are land and labor,
Capital is their product, and the capitalist is but an inter-
mediary between the landlord and the laborer. Hence
working-men who imagine that capital is the oppressor
of labor are " barking up the wrong tree." In the first
place, much that seems on the surface like oppression by
capital is in reality the result of the helplessness to which
labor is reduced by being denied all right to the use of
land. "The destruction of the poor is their poverty."

* The largest owners of Pittsburgh land are an English family
named Schenley, who draw in ground-rents a great revenue, thus (to
the gratification of Pennsylvania protectionists) increasing our
exports over our imports, just as though they owned so many Penn-
sylvanians.

976 PROTECTION OB FREE TRADE?

It is not in the power of capital to compel men who can
obtain free access to nature to sell their labor for starva-
tion wages. In the second place, whatever of the earn-
ings of labor capitalistic monopolies may succeed in
appropriating, they are merely lesser robbers, who take
what, if they were abolished, landownership would take.

No matter whether the social organization be simple or
complex, no matter whether the intermediaries between
the owners of land and the owners of the mere power to
labor be few or many, wherever the available land has
been fully appropriated as the property of some of the
people, there must exist a class, the laborers of ordinary
ability and skill, who can never hope to get more than a
bare living for the hardest toil, and who are constantly
in danger of failure to get even that.

We see that class existing in the simple industrial
organization of western Ireland or the Scottish High-
lands, and we see it, still lower and more degraded, in
the complex industrial organization of the great British
cities. In spite of the enormous increase of productive
power, we have seen it developing in the United States,
just as the appropriation of our land has gone on. This
is as it must be, for the most fundamental of all human
relations is that between man and the planet he inhabits.

How the recognition of the consequences involved in
the division of men into a class of world-owners and a
class who have no legal right to the use of the world
explains many things otherwise inexplicable I cannot
here point out, since I am dealing only with the tariff
question. We have seen why what is miscalled "free
trade" the mere abolition of protection can only tem-
porarily benefit the working-classes, and we have now
reached a position which will enable us to proceed with
our inquiry and ascertain what the effects of true fre
trade would be.

CHAPTER XXVI.

TRUE FREE TRADE.

with me," said Richard Cobden, as John
Bright turned heart-stricken from a new-made
grave. "There are in England women and children
dying with hungerwith hunger made by the laws.
Come with me, and we will not rest until we repeal those
laws."

In this spirit the free-trade movement waxed and
grew, arousing an enthusiasm that no mere fiscal reform
could have aroused. And intrenched though it was by
restricted suffrage and rotten boroughs and aristocratic
privilege, protection was overthrown in Great Britain.

And there is hunger in Great Britain still, and
women and children yet die of it.

But this is not the failure of free trade. When protec-
tion had been abolished and a revenue tariff substituted
for a protective tariff, free trade had won only an out-
post. That women and children still die of hunger in
Great Britain arises from the failure of the reformers
to go on. Free trade has not yet been tried in Great
Britain. Free trade in its fullness and entirety would
indeed abolish hunger.

This we may now see.

Our inquiry has shown that the reason why the aboli-
tion of protection, greatly as it would increase the pro-

277

278 PROTECTION OB PEEE TRADE?

duction of wealth, can accomplish no permanent benefit
for the laboring class, is, that so long as the land on
which all must live is made the property of some,
increase of productive power can only increase the
tribute which those who own the land can demand for its
use. So long as land is held to be the individual
property of but a portion of its inhabitants no possible
increase of productive power, even if it went to the
length of abolishing the necessity of labor, and no
imaginable increase of wealth, even though it poured
down from heaven or gushed up from the bowels of the
earth, could improve the condition of those who possess
only the power to labor. The greatest imaginable
increase of wealth could only intensify in the greatest
imaginable degree the phenomena which we are familiar
with as " over-production w could only reduce the labor-
ing-class to universal pauperism.

Thus it is, that to make either the abolition of protec-
tion or any other reform beneficial to the working-class
we must abolish the inequality of legal rights to land,
and restore to all their natural and equal rights in the
common heritage.

How can this be done T

Consider for a moment precisely what it is that needs
to be done, for it is here that confusion sometimes arises.
To secure to each of the people of a country his equal
right to the land of that country does not mean to
secure to each an equal piece of land. Save in an
extremely primitive society, where population was sparse,
the division of labor had made little progress, and family
groups lived and worked in common, a division of land
into anything like equal pieces would indeed be imprac-
ticable. In a state of society such as exists in civilized
countries to-day, it would be extremely difficult, if not
altogether impossible, to make an equal division of land

TRUE FREE TRADE. 279

Nor would one such division suffice. With the first
division the difficulty would only begin. Where popula-
tion is increasing and its centers are constantly chang-
ing; where different vocations make different uses of
land and require different qualities and amounts of it;
where improvements and discoveries and inventions are
constantly bringing out new uses and changing relative
values, a division that should be equal to-day would soon
become very unequal, and to maintain equality a redivi-
sion every year would be necessary.

But to make a redivision every year, or to treat land
as a common, where no one could claim the exclusive use
of any particular piece, would be practicable only where
men lived in movable tents and made no permanent
improvements, and would effectually prevent any ad-
vance beyond such a state. No one would sow a crop,
or build a house, or open a mine, or plant an orchard, or
cut a drain, so long as any one else could come in and
turn him out of the land in which or on which such
improvements must be fixed. Thus it is absolutely
necessary .to the proper use and improvement of land
that society should secure to the user and improver safe
possession.

This point is constantly raised by those who resent
any questioning of our present treatment of land. They
seek to befog the issue by persistently treating every
proposition to secure equal rights to land as though it
were a proposition to secure an equal division of land,
and attempt to defend private property in land by set-
ting forth the necessity of securing safe possession to
the improver.

But the two things are essentially different.

In the first place equal rights to land could not be
secured by the equal division of land, and in the second
place it is not necessary to make land the private prop-

280 PROTECTION OB FREE TRADE!

erty of individuals in order to secure to improvers that
safe possession of their improvements that is needed to
induce men to make improvements. On the contrary,
private property in land, as we may see in any country
where it exists, enables mere dogs in the manger to levy
blackmail upon improvers. It enables the mere owner
of land to compel the improver to pay him for the privi-
lege of making improvements, and in many cases it
enables him to confiscate the improvements.

Here are two simple principles, both of which are self*
evident :

I. That all men have equal rights to the use and
enjoyment of the elements provided by Nature.

II. That each man has an exclusive right to the use
and enjoyment of what is produced by his own labor.

There is no conflict between these principles. On the
contrary they are correlative. To secure fully the
individual right of property in the produce of labor we
must treat the elements of nature as common property.
If any one could claim the sunlight as his property and
could compel me to pay him for the agency of the sun in
the growth of crops I had planted, it would necessarily
lessen my right of property in the produce of my labor.
And conversely, where every one is secured the full right of
property in the produce of his labor, no one can have any
right of property in what is not the produce of labor.

No matter how complex the industrial organization,
nor how highly developed the civilization, there is no
real difficulty in carrying out these principles. All we
have to do is to treat the land as the joint property of
the whole people, just as a railway is treated as the joint
property of many shareholders, or as a ship is treated as
the joint property of several owners.

In other words, we can leave land now being used in
the secure possession of those using it, and leave land

TRUE FREE TRADE. 281

now unused to be taken possession of by those who wish
to make use of it, on condition that those who thus hold
land shall pay to the community a fair rent for the
exclusive privilege they enjoy that is to say, a rent
based on the value of the privilege the individual
receives from the community in being accorded the
exclusive use of this much of the common property, and
which should have no reference to any improvement he
had made in or on it, or to any profit due to the use of
his labor and capital. In this way all would be placed
upon an equality in regard to the use and enjoyment of
those natural elements which are clearly the common
heritage, and that value which attaches to land, not
because of what the individual user does, but because of
the growth of the community, would accrue to the com-
munity, and could be used for purposes of common
benefit. As Herbert Spencer has said of it:

Such a doctrine is consistent with the highest state of civilization ;
may be carried out without involving a community of goods, and
need cause no very serious revolution in existing arrangements.
The change required would be simply a change of landlords. Sepa-
rate ownership would merge into the joint-stock ownership of the
public. Instead of being in the possession of individuals, the coun-
try would be held by the great corporate body society. ... A
state of things so ordered would be in perfect harmony with the
moral law. Under it all men would be equally landlords, all men
would be alike free to become tenants. Clearly, therefore, on such
a system the earth might be inclosed, occupied and cultivated, in
entire subordination to the law of equal freedom.

That this simple change would, as Mr. Spencer says,
involve no serious revolution in existing arrangements is
in many cases not perceived by those who think of it for
the first time. It is sometimes said that while this prin-
ciple is manifestly just, and while it would be easy to
apply it to a new country just being settled, it would be

282 PROTECTION OB FREE TRADE!

exceedingly difficult to apply it to an already settled
country where land had already been divided as private
property, since, in such a country, to take possession of
the land as common property and let it out to individuals
would involve a sudden revolution of the greatest mag-
nitude.

This objection, however, is founded upon the mistaken
idea that it is necessary to do everything at once. But
it often happens that a precipice we could not hope to
climb, and that we might well despair of making a
ladder long enough and strong enough to scale, may be
surmounted by a gentle road. And there is in this case
a gentle road open to us, which will lead us so far that
the rest will be but an easy step. To make land virtually
the common property of the whole people, and to appro-
priate ground-rent for public use, there is a much
simpler and easier way than that of formally assuming
the ownership of land and proceeding to rent it out in
lots a way that involves no shock, that will conform to
present customs, and that, instead of requiring a great
increase of governmental machinery, will permit of a
great simplification of governmental machinery.

In every well-developed community large sums are
needed for common purposes, and the sums thus needed
increase with social growth, not merely in amount, but
proportionately, since social progress tends steadily to
devolve on the community as a whole functions which in
a ruder stage are discharged by individuals. Now, while
people are not used to paying rent to government, they
are used to paying taxes to government. Some of these
taxes are levied upon personal or movable property;
some upon occupations or businesses or persons (as in
the case of income taxes, which are in reality taxes on
persons according to income) ; some upon the transporta-
tion or exchange of commodities, in which last category

TEUE FREE TRADE. 283

fall the taxes imposed by tariffs; and some, in the
United States at least, on real estate that is to say, on
the value of land and of the improvements upon it,
taken together.

That part of the tax on real estate which is assessed
on the value of land irrespective of improvements is, in
its nature, not a tax, but a rent a taking for the com-
mon use of the community of a part of the income that
properly belongs to the community by reason of the
equal right of all to the use of land.

Now it is evident that, in order to take for the use of
the community the whole income arising from land, just
as effectually as it could be taken by formally appro-
priating and letting out the land, it is only necessary to
abolish, one after another, all other taxes now levied,
and to increase the tax on land values till it reaches, as
near as may be, the full annual value of the land.

Whenever this point of theoretical perfection is
reached, the selling value of land will entirely disappear,
and the charge made to the individual by the commu*
nity for the use of the common property will become in
form what it is in fact a rent. But until that point is
reached, this rent may be collected by the simple increase
of a tax already levied in all our States, assessed (as
direct taxes are now assessed) upon the selling value of
land irrespective of improvements a value that can be
ascertained more easily and more accurately than any
other value.

For a full exposition of the effects of this change in
the method of raising public revenues, I must refer the
reader to the works in which I have treated this branch
of the subject at greater length than is here possible.
Briefly, they would be threefold :

In the first place, all taxes that now fall upon the exer-
tion of labor or use of capital would be abolished. No

284 PROTECTION OE FREE TRADE?

one would be taxed for building a house or improving a
farm or opening a mine, for bringing things in from
foreign countries, or for adding in any way to the stock
of things that satisfy human wants and constitute
national wealth. Every one would be free to make and
save wealth ; to buy, sell, give or exchange, without let
or hindrance, any article of human production the use
of which did not involve any public injury. All those
taxes which increase prices as things pass from hand to
hand, falling finally upon the consumer, would disappear.
Buildings or other fixed improvements would be as
secure as now, and could be bought and sold, as now,
subject to the tax or ground-rent due to the community
for the ground on which they stood. Houses and the
ground they stand on, or other improvements and the
land they are made on, would also be rented as now.
But the amount the tenant would have to pay would be
less than now, since the taxes now levied on buildings or
improvements fall ultimately (save in decaying commu-
nities) on the user, and the tenant would therefore get
the benefit of their abolition. And in this reduced rent
the tenant would pay all those taxes that he now has to
pay in addition to his rent any remainder of what he
paid on account of the ground going not to increase the
wealth of a landlord, but to add to a fund in which the
tenant himself would be an equal sharer.

In the second place, a large and constantly increasing
fund would be provided for common uses, without any
tax on the earnings of labor or on the returns of capital
a fund which in well-settled countries would not only
suffice for all of what are now considered necessary
expenses of government, but would leave a large surplus
to be devoted to purposes of general benefit.

In the third place, and most important of all, the
monopoly of land would be abolished, and land would be

TRUE FREE TRADE. 285

thrown open and kept open to the use of labor, since it
would be unprofitable for any one to hold land without
putting it to its full use, and both the temptation and
the power to speculate in natural opportunities would be
gone. The speculative value of land would be destroyed
as soon as it was known that, no matter whether land
was used or not, the tax would increase as fast as the
value increased; and no one would want to hold land
that he did not use. With the disappearance of the capi-
talized or selling value of land, the premium which must
now be paid as purchase money by those who wish to
use land would disappear, differences in the value of
land being measured by what would have to be paid for
it to the community, nominally in taxes but really in
rent. So long as any unused land remained, those who
wished to use it could obtain it, not only without the
payment of any purchase price, but without the payment
of any tax or rent. Nothing would be required for the
use of land till less advantageous land came into use,
and possession thus gave an advantage over and above
the return to the labor and capital expended upon it.
And no matter how much the growth of population and
the progress of society increased the value of land, this
increase would go to the whole community, swelling that
general fund in which the poorest would be an equal
sharer with the richest.

Thus the great cause of the present unequal distribu-
tion of wealth would be destroyed, and that one-sided
competition would cease which now deprives men who
possess nothing but power to labor of the benefits of
advancing civilization, and forces wages to & minimum
no matter what the increase of wealth. Labor, free to
the natural elements of production, would no longer be
incapable of employing itself, and competition, acting as
fully and freely between employers as between employed,

286 PROTECTION OR FREE TRADE*

would carry wages up to what is truly their natural rate
the full value of the produce of labor and keep them there.

Let us turn again to the tariff question.

The mere abolition of protection the mere substitu-
tion of a revenue tariff for a protective tariff is such a
lame and timorous application of the free-trade principle
that it is a misnomer to speak of it as free trade. A
revenue tariff is only a somewhat milder restriction on
trade than a protective tariff.

Free trade, in its true meaning, requires not merely
the abolition of protection but the sweeping away of all
tariffs the abolition of all restrictions (save those
imposed in the interests of public health or morals) on
the bringing of things into a country or the carrying of
things out of a country.

But free trade cannot logically stop with the abolition
of custom-houses. It applies as well to domestic as to
foreign trade, and in its true sense requires the abolition
of all internal taxes that fall on buying, selling, trans-
porting or exchanging, on the making of any transaction
or the carrying on of any business, save of course where
the motive of the tax is public safety, health or morals.

Thus the adoption of true free trade involves the
abolition of all indirect taxation of whatever kind, and
the resort to direct taxation for all public revenues.

But this is not all. Trade, as we have seen, is a mode
of production, and the freeing of trade is beneficial be-
cause it is a freeing of production. For the same reason,
therefore, that we ought not to tax any one for adding to
the wealth of a country by bringing valuable things into
it, we ought not to tax any one for adding to the wealth
of a country by producing within that country valuable
things. Thus the principle of free trade requires that we
should not merely abolish all indirect taxes, but that

TRUE FREE TRADE. 287

we should abolish as well all direct taxes on things that
are the produce of labor ; that we should, in short, give
full play to the natural stimulus to productionthe
possession and enjoyment of the things produced by
imposing no tax whatever upon the production, accumu-
lation or possession of wealth (i.e., things produced by
labor), leaving every one free to make, exchange, give,
spend or bequeath.

There are thus left, as the only taxes by which in
accordance with the free-trade principle revenue can be
raised, these two classes :

1. Taxes on ostentation.

Since the motive of ostentation in the use of wealth is
simply to show the ability to expend wealth, and since
this can be shown as well in the ability to pay a tax,
taxes on ostentation pure and simple, while not checking
the production of wealth, do not even restrain the enjoy-
ment of wealth. But such taxes, while they have a place
in the theory of taxation, are of no practical importance.
Some trivial amount is raised in England from taxes on
footmen wearing powdered wigs, taxes on armorial bear-
ings, etc., but such taxes are not resorted to in this
country, and are incapable anywhere of yielding any
considerable revenue.

2. Taxes on the value of land.

Taxes on the value of land must not be confounded
with taxes on land, from which they differ essentially.
Taxes on land that is to say, taxes levied on land by
quantity or area apply equally to all land, and hence
fall ultimately on production, since they constitute a
check to the use of land, a tax that must be paid as the
condition of engaging in production. Taxes on land
values, however, do not fall upon all land, but only upon
valuable land, and on that in proportion to its value.
Hence they do not in any degree check the ability of

288 PROTECTION OB FREE TRADE f

labor to avail itself of land, and are merely an appro-
priation, by the taxing power, of a portion of the pre-
mium which the owner of valuable land can charge labor
for its use. In other words, a tax on land, according to
quantity, could ultimately be transferred by owners of
land to users of land and become a tax upon production.
But a tax on land values must, as is recognized by all
economists, fall on the owner of land and cannot be by
him in any way transferred to the user. The landowner
can no more compel those to whom he may sell or let his
land to pay a tax levied on its value, than he could
compel them to pay a mortgage.

A tax on land values is of all taxes that which best
fulfils every requirement of a perfect tax. As land
cannot be hidden or carried off, a tax on land values can
be assessed with more certainty and can be collected
with greater ease and less expense than any other tax,
while it does not in the slightest degree check production
or lessen its incentive. It is, in fact, a tax only in form,
being in nature a rent a taking for the use of the com-
munity of a value that arises not from individual exer-
tion but from the growth of the community. For it is
not anything that the individual owner or user does that
gives value to land. The value that he creates is a value
that attaches to improvements. This, being the result
of individual exertion, properly belongs to the individual,
and cannot be taxed without lessening the incentive to
production. But the value that attaches to land itself is
a value arising from the growth of the community and
increasing with social growth. It, therefore, properly
belongs to the community, and can be taken to the last
penny without in the slightest degree lessening the incen-
tive to production.

Taxes on land values are thus the only taxes from
which ; in accordance with the principle of free trade,

TRUE FREE TRADE. 289

any considerable amount of revenue can be raised, and
it is evident that to carry out the free-trade principle to
the point of abolishing all taxes that hamper or lessen
production would of itself involve very nearly the same
measures which we have seen are required to assert the
common right to land and place all citizens upon an
equal footing.

To make these measures identically the same, it is only
necessary that the taxation of land values, to which true
free trade compels us to resort for public revenues,
should be carried far enough to take, as near as might
practically be, the whole of the income arising from the
value given to land by the growth of the community.

But we have only to go one step further to see that
free trade does, indeed, require this, and that the two
reforms are thus absolutely identical.

Free trade means free production. Now fully to free
production it is necessary not only to remove all taxes
on production, but also to remove all other restrictions
on production. True free trade, in short, requires that
the active factor of production, Labor, shall have free
access to the passive factor of production, Land. To
secure this all monopoly of land must be broken up, and
the equal right of all to the use of the natural elements
must be secured by the treatment of the land as the
common property in usufruct of the whole people.

Thus it is that free trade brings us to the same simple
measure as that which we have seen is necessary to
emancipate labor from its thraldom and to secure that
justice in the distribution of wealth which will make
every improvement or reform beneficial to all classes.

The partial reform miscalled free trade, which consists
in the mere abolition of protection the mere substitu-
tion of a revenue tariff for a protective tariff cannot
help the laboring-classes, because it does not touch the

290 PROTECTION OB FREE TRADE?

fundamental cause of that unjust and unequal distribu-
tion which, as we see to-day, makes "labor a drug and
population a nuisance " in the midst of such a plethora
of wealth that we talk of over-production. True free
trade, on the contrary, leads not only to the largest pro-
duction of wealth, but to the fairest distribution. It is
the easy and obvious way of bringing about that change
by which alone justice in distribution can be secured, and
the great inventions and discoveries which the human
mind is now grasping can be converted into agencies for
the elevation of society from its very foundations.

This was seen with the utmost clearness by that knot
of great Frenchmen who, in the last century, first raised
the standard of free trade. What they proposed was
not the mere substitution of a revenue tariff for a protec-
tive tariff, but the total abolition of all taxes, direct and
indirect, save a single tax upon the value of land the
impdt unique. They realized that this unification of taxa-
tion meant not merely the removal from commerce and
industry of the burdens placed upon them, but that it
also meant the complete reconstruction of society the
restoration to all men of their natural and equal rights
to the use of the earth. It was because they realized
this, that they spoke of it in terms that applied to any
mere fiscal change, however beneficial, would seem wildly
extravagant, likening it, in its importance to mankind,
to those primary inventions which made the first
advances in civilization possible the use of money and
the adoption of written characters.

And whoever will consider how far-reaching are the
benefits that would result to mankind from a measure
which, removing all restrictions from the production of
wealth, would also secure equitable distribution, will see
that these great Frenchmen were not extravagant.

True free trade would emancipate labor.

CHAPTER XXVII.

THE LION IN THE WAY.

WE may now see why the advocacy of free trade has
been so halting and half-hearted.

It is because the free-trade principle carried to its
logical conclusion would destroy that monopoly of
nature's bounty which enables those who do no work to
live in luxury at the expense of "the poor people who
have to work," that so-called free traders have not ven-
tured to ask even the abolition of tariffs, but have
endeavored to confine the free-trade principle to the
mere abolition of protective duties. To go further
would be to meet the lion of "vested interests."

In Great Britain the ideas of Quesnay and Turgot
found a soil in which, at the time, they could grow only
in stunted form. The power of the landed aristocracy
was only beginning to find something of a counterpoise
in the growth of the power of capital, and in politics,
as in literature, Labor had no voice. Adam Smith
belonged to that class of men of letters always disposed
by strong motives to view things which the dominant
class deem essential in the same light as they do, and
who before the diffusion of education and the cheapening
of books could have had no chance of being heard on
any other terms. Under the shadow of an absolute
despotism more liberty of thought and expression may

291

202 PROTECTION OB FREE TBADET

sometimes be enjoyed than where power is more diffused,
and forty years ago it would doubtless have been safer
to express in Russia opinions adverse to serfdom than in
South Carolina to have questioned slavery. And so,
while Quesnay, the favorite physician of the master of
Prance, could in the palace of Versailles carry his free-
trade propositions to the legitimate conclusion of the
impdt unique, Adam Smith, had he been so radical, could
hardly have got the leisure to write "The Wealth of
Nations" or the means to print it.

I am not criticizing Adam Smith, but pointing out
conditions which have affected the development of an
idea. The task which Adam Smith undertookthat of
showing the absurdity and impolicy of protective tariffs
was in his time and place a sufficiently difficult one,
and even if he saw how much further than this the prin-
ciples he enunciated really led, the prudence of the man
who wishes to do what may be done in his day and
generation, confident that where he lays the foundation
others will in due time rear the edifice, might have
prompted him to avoid carrying them further.

However this may be, it is evidently because free
trade really goes so far, that British free traders, so
called, have been satisfied with the abolition of protec-
tion, and, abbreviating the motto of Quesnay, " Clear the
ways and let things alone,' 7 into "Let things alone," have
shorn off its more important half. For one step further
the advocacy of the abolition of revenue tariffs, as well
as of protective tariffs would have brought them upon
dangerous ground. It is not only, as English writers
intimate to excuse the retaining of a revenue tariff, that
direct taxation could not be resorted to without arousing
the British people to ask themselves why they should
continue to support the descendants of royal favorites,
and to pay interest on the vast sums spent during former

THE LION IN THE WAY. 293

generations in worse than useless wars; but it is that
direct taxation could not be advocated without danger
to even more important "vested interests." One step
beyond the abolition of protective duties, and the British
free-trade movement must have come full against that
fetish which for some generations the British people
have been taught to reverence as the very Ark of the
Covenant private property in land.

For in the British kingdoms (save in Ireland and the
Scottish Highlands) private property in land was not
instituted in the short and easy way in which Will
Atkins endeavored to institute it on Crusoe's island. It
has been the gradual result of a long series of usurpa-
tions and spoliations. In the view of British law there
is to-day but one owner of British soil, the Crown that
is to say, the British people. The individual landholders
are still in constitutional theory what they once were in
actual fact mere tenants. The process by which they
have become virtual owners has been that of throwing
upon indirect taxation the rents and taxes they were
once held .to pay in return for their lands, while they
have added to their domains by fencing in the commons,
in much the same manner as some of the same class
have recently fenced in large tracts of our own public
domain.

The entire abolition of the British tariff would involve
as a necessary consequence the abolition of the greater
part of the internal indirect taxation, and would thus
compel heavy direct taxation, which would fall not upon
consumption but upon possession. The moment this
became necessary, the question of what share should be
borne by the holders of land must inevitably arise in
such a way as to open the whole question of the rightful
ownership of British soil. For not only do all economic
considerations point to a tax on land values as the

294 PROTECTION OB FBEE TBADEf

proper source of public revenues ; but so do all British
traditions. A land tax of four shillings in the pound of
rental value is still nominally enforced in England, but
being levied on a valuation made in the reign of William
III., it amounts in reality to not much over a penny in
the pound. With the abolition of indirect taxation this
is the tax to which men would naturally turn. The
resistance of landholders would bring up the question of
title, and thus any movement which went so far as to
propose the substitution of direct for indirect taxation
must inevitably end in a demand for the restoration to
the British people of their birthright.

This is the reason why in Great Britain the free-trade
principle was aborted into that spurious thing "British
free trade," which calls a sudden halt to its own prin-
ciples, and after demonstrating the injustice and impolicy
of all tariffs, proceeds to treat tariffs for revenue as
something that must of necessity exist.

In assigning these reasons for the failure to carry the
free-trade movement further than the abolition of pro-
tection, I do not, of course, mean to say that such
reasons have consciously swayed free traders. I am
definitely pointing out what by them has been in many
cases doubtless only vaguely felt. We imbibe the sym-
pathies, prejudices and antipathies of the circle in which
we move, rather than acquire them by any process of
reasoning. And the prominent advocates of free trade,
the men who have been in a position to lead and educate
public opinion, have belonged to the class in which the
feelings I speak of hold sway for that is the class of
education and leisure.

In a society where unjust division of wealth gives the
fruits of labor to those who do not labor, the classes who
control the organs of public education and opinion the
classes to whom the many are accustomed to look for

THE LION IN THE WAY. 205

light and leading, must be loath to challenge the primary
wrong, whatever it may be. This is inevitable, from the
fact that the class of wealth and leisure, and conse-
quently of culture and influence, must be, not the class
which loses by the unjust distribution of wealth, but the
class which (at least relatively) gains by it.

Wealth means power and "respectability," while
poverty means weakness and disrepute. So in such a
society the class that leads and is looked up to, while
it may be willing to tolerate vague generalities and
impracticable proposals, must frown on anj attempt to
trace social evils to their real cause, since that is the
cause that gives their class superiority. On the other
hand, the class that suffers by these evils is, on that
account, the ignorant and uninfluential class, the class
that, from its own consciousness of inferiority, is prone
to accept the teachings and imbibe the prejudices of the
one above it ; while the men of superior ability that arise
within it and elbow their way to the front are constantly
received into the ranks of the superior class and inter-
ested in its service, for this is the class that has rewards
to give. Thus it is that social injustice so long endures
and is so difficult to make head against.

Thus it was that in our Southern States while slavery
prevailed, the influence, not only of the slaveholders
themselves, but of churches and colleges, the professions
and the press, condemned so effectually any questioning
of slavery, that men who never owned and never
expected to own a slave were ready to persecute and
ostracize any one who breathed a word against property
in flesh and blood ready, even, when the time came, to
go themselves and be shot in defense of the "peculiar
institution."

Thus it was that even slaves believed abolitionists the
worst of humankind^ and were ready to join in the sport

296 PROTECTION OB FREE TRADE T

of tarring and feathering one. And so, an institution
in which only a comparatively small class were inter-
ested, and which was in reality so unprofitable, even to
them, that now that slavery has been abolished, it would
be hard to find an ex-slaveholder who would restore it if
he could, not only dominated public opinion where it
existed, but exerted such influence at the North, where
it did not exist, that " abolitionist " was for a long time
suggestive of "atheist," "communist" and "incendiary."
The effect of the introduction of steam and labor-sav-
ing machinery upon the industries of Great Britain was
such a development of manufactures as to do away with
all semblance of benefit to the manufacturing classes
from import duties, to raise up a capitalistic power
capable of challenging the dominance of the "landed
interest," and by concentrating workmen in towns to
make of them a more important political factor. The
abolition of protection in Great Britain was carried,
against the opposition of the agricultural landholders, by
a combination of two elements, capital and labor, neither
of which would, of itself, have been capable of winning
the victory. But, of the two, that which was represented
by the Manchester manufacturers possessed much more
effective and independent strength than that whose spirit
breathed in the Anti-Corn-Law rhymes. Capital fur-
nished the leadership, the organizing ability and the
financial means for agitation, and when it was satisfied,
the further progress of the free-trade movement had to
wait for the growth of a power which, as an independent
factor, is only now beginning to make its entrance into
British politics. Any advance toward the abolition of
revenue duties would not only have added the strength
of the holders of municipal and mining land to that of
the holders of agricultural land, but would also have
arrayed in opposition the very class most efficient in the

THE LION IN THE WAY. 297

free-trade movement. For, save where their apparent
interests come into clear and strong opposition, as they
did in Great Britain upon the question of protective
duties, capitalists as a class share the feelings that ani-
mate landholders as a class. Even in England, where the
division between the three economic orders landholders,
capitalists and laborers is clearer than anywhere else,
the distinction between landholders and capitalists is
more theoretical than real. That is to say, the land-
holder is generally a capitalist as well, and the capitalist
is generally in actuality or expectation to some extent a
landholder, or by the agency of leases and mortgages is
interested in the profits of landholding. Public debts
and the investments based thereon constitute, moreover,
a further powerful agency in disseminating through
the whole "House of Have" a bitter antipathy to any-
thing that might bring the origin of property into dis-
cussion.

In the United States the same principles have operated,
though owing to differences in industrial development
the combinations have been different. Here the interest
that could not be " protected " has been the agricultural,
and the active and powerful manufacturing interest has
been on the side of protective duties. And though the
"landed interest" here has not been so well intrenched
politically as in Great Britain, yet not only has land-
ownership been more widely diffused, but our rapid
growth has interested a larger proportion of the present
population in anticipating, by speculation based on
increasing land values, the power of levying tribute on
those yet to come. Thus private property in land has
been in reality even stronger here than in Great Britain,
while it has been to those interested in it that the oppo-
nents of protection have principally appealed. Under
such circumstances there has been here even less disposi-

PROTECTION OB FREE TRADE!

tion than in Great Britain to carry the free-trade prin-
ciple to its legitimate conclusions, and free trade has
been presented to the American people in the emascu-
lated shape of a "revenue reform" too timid to ask for
even "British free trade."

CHAPTER

FREE TRADE AND SOCIALISM.

rpHROUGHOUT the civilized world, and preeminently
JL in Great Britain and the United States, a power is
now arising which is capable of carrying the principles
of free trade to their logical conclusion. But there are
difficulties in the way of concentrating this power on
such a purpose.

It requires reflection to see that manifold effects result
from a single cause, and that the remedy for a multitude
of evils may lie in one simple reform. As in the infancy
of medicine, men were disposed to think each distinct
symptom called for a distinct remedy, so when thought
begins to turn to social subjects there is a disposition to
seek a special cure for every ill, or else (another form of
the same short-sightedness) to imagine the only adequate
remedy to be something which presupposes the absence
of those ills; as, for instance, that all men should be
good, as the cure for vice and crime j or that all mei*
should be provided for by the state, as the cure for
poverty.

There is now sufficient social discontent and a suffi-
cient desire for social reform to accomplish great things
if concentrated on one line. But attention is distracted
and effort divided by schemes of reform which though
they may be good in themselves are, with reference to

290

300 PROTECTION OB FREE TRADE?

the great end to be attained, either inadequate or super-
adequate.

Here is a traveler who, beset by robbers, has been left
bound, blindfolded and gagged. Shall we stand in a
knot about him and discuss whether to put a piece of
court-plaster on his cheek or a new patch on Ms coat, or
shall we dispute with each other as to what road he
ought to take and whether a bicycle, a tricycle, a horse
and wagon, or a railway, would best help him on?
Should we not rather postpone such discussion until we
have cut the man's bonds ? Then he can see for himself,
speak for himself, and help himself. Though with a
scratched cheek and a torn coat, he may get on his feet,
and if he cannot find a conveyance to suit him, he will at
least be free to walk.

Very much like such a discussion is a good deal of
that now going on over " the social problem "a discus-
sion in which all sorts of inadequate and impossible
schemes are advocated to the neglect of the simple plan
of removing restrictions and giving Labor the use of its
own powers.

This is the first thing to do. And, if not of itself suffi-
cient to cure all social ills and bring about the highest
social state, it will at least remove the primary cause of
wide-spread poverty, give to all the opportunity to use
their labor and secure the earnings that are its due, stimu-
late all improvement, and make all other reforms easier.

It must be remembered that reforms and improve-
ments in themselves good may be utterly inefficient to work
any general improvement until some more fundamental
reform is carried out. It must be remembered that there
is in every work a certain order which must be observed
to accomplish anything. To a habitable house a roof is
as important as walls ; and we express in a word the end
to which a house is built when we speak of putting a

FREE TRADE AND SOCIALISM. 301

roof over our heads. But we cannot build a house from
roof down ; we must build from foundation up.

To recur to our simile of the laborer habitually preyed
upon by a series of robbers. It is surely wiser in him to
fight them one by one, than all together. And the
robber that takes all he has left is the one against whom
his efforts should first be directed. For no matter how
he may drive off the other robbers, that will not avail
him except as it may make it easier to get rid of the
robber that takes all that is left. But by withstanding
this robber he will secure immediate relief, and being
able to get home more of his earnings than before, will
be able so to nourish and strengthen himself that he can
better contend with robbers can, perhaps, buy a gun or
hire a lawyer, according to the method of fighting in
fashion in his country.

It is in just such a way as this that Labor must seek
to rid itself of the robbers that now levy upon its earnings.
Brute strength will avail little unless guided by intelligence.

The first attempts of working-men to improve their
condition are by combining to demand higher wages of
their direct employers. Something can be done in this
way for those within such organizations ; but it is after
all very little. For a trades-union can only artificially
lessen competition within the trade ; it cannot affect the
general conditions which force men into bitter competi-
tion with each other for the opportunity to gain a living.
And such organizations as the Knights of Labor, which
are to trades-unions what the trades-union is to its indi-
vidual members, while they give greater power, must
encounter the same difficulties in their efforts to raise
wages directly. All such efforts have the inherent disad-
vantage of struggling against general tendencies. They
are like the attempts of a man in a crowd to gain room
bv forcing back those who press upon him like attempts

302 PROTECTION OB FREE TRADE?

to stop a great engine by the sheer force of human mus-
cle, without cutting off steam.

This, those who are at first inclined to put faith in the
power of trades-unionism are beginning to see, and the
logic of events must more and more lead them to see.
But the perception that to accomplish large results gen-
eral tendencies must be controlled, inclines those who do
not analyze these tendencies into their causes to transfer
faith from some form of the voluntary organization of
labor to some form of governmental organization and
direction.

All varieties of what is vaguely called socialism recog-
nize with more or less clearness the solidarity of the
interests of the masses of all countries. Whatever may
be objected to socialism in its extremest forms, it has at
least the merit of lessening national prejudices and aim-
ing at the disbandment of armies and the suppression of
war. It is thus opposed to the cardinal tenet of protec-
tionism that the interests of the people of different
"nations" are diverse and antagonistic. But, on the
other hand, those who call themselves socialists, so far
from being disposed to look with disfavor upon govern-
mental interference and regulation, are disposed to sym-
pathize with protection as in this respect in harmony
with socialism, and to regard free trade, at least as it has
been popularly presented, as involving a reliance on that
principle of free competition which to their thinking
means the crushing of the weak.

Let us endeavor, as well as can in brief be done, to
trace the relations between the conclusions to which we
have come and what, with various shades of meaning, is
termed " socialism." *

* The term " socialism is used so loosely that it is hard to attach
to it a definite meaning. I myself am classed as a socialist by those

PBEE TBADE AND SOCIALISM. 303

In socialism as distinguished from individualism there
is an unquestionable truth and that a truth to which
(especially by those most identified with free-trade princi-
ples) too little attention has been paid. Man is primarily
an individual a separate entity, differing from his fel-
lows in desires and powers, and requiring for the exercise
of those powers and the gratification of those desires
individual play and freedom. But he is also a social
being, having desires that harmonize with those of his
fellows, and powers that can be brought out only in con-
certed action. There is thus a domain of individual
action and a domain of social action some things which
can best be done when each acts for himself, and some
things which can best be done when society acts for all
its members. And the natural tendency of advancing
civilization is to make social conditions relatively more
important, and more and more to enlarge the domain of
social action. This has not been sufficiently regarded,
and at the present time, evil unquestionably results from
leaving to individual action functions that by reason of
the growth of society and the development of the arts
have passed into the domain of social action ; just as, on
the other hand, evil unquestionably results from social
interference with what properly belongs to the individual.

who denounce socialism, while those who profess themselves social
ists declare me not to be one. For my own part I neither claim nor
repudiate the name, and realizing as I do the correlative truth of
both principles can no more call myself an individualist or a socialist
than one who considers the forces by which the planets are held to
their orbits could call himself a centrifugalist or a centripetalist.
The German socialism of the school of Marx (of which the leading
representative in England is Mr. H. M. Hyndman, and the best
exposition in America has been given by Mr. Laurence Gronlund)
seems to me a high-purposed but incoherent mixture of truth and
fallacy, the defects of which may be summed up in its want of radi-
calismthat is to say, of going to the root.

304 PROTECTION OR FREE TRADE!

Society ought not to leave the telegraph and the railway
to the management and control of individuals; nor yet
ought society to step in and collect individual debts or
attempt to direct individual industry.

But while there is a truth in socialism which individu-
alists forget, there is a school of socialists who in like
manner ignore the truth there is in individualism, and
whose propositions for the improvement of social condi-
tions belong to the class I have called " super-adequate."
Socialism in its narrow sense the socialism that would
have the state absorb capital and abolish competition is
the scheme of men who, looking upon society in its most
complex organization, have failed to see that principles
obvious in a simpler stage still hold true in the more in-
timate relations that result from the division of labor
and the use of complex tools and methods, and have thus
fallen into fallacies elaborated by the economists of a
totally different school, who have taught that capital is
the employer and sustainer of labor, and have striven to
confuse the distinction between property in land and
property in labor-products. Their scheme is that of men
who, while revolting from the heartlessness and hopeless-
ness of the " orthodox political economy," are yet entan-
gled in its fallacies and blinded by its confusions. Con-
founding "capital" with "means of production," and
accepting the dictum that " natural wages " are the least
on which competition can force the laborer to live, they
essay to cut a knot they do not see how to unravel, by
making the state the sole capitalist and employer, and
abolishing competition.

The carrying on by government of all production and
exchange, as a remedy for the difficulty of finding
employment on the one side, and for overgrown fortunes
on the other, belongs to the same category as the pre-
scription that all men should be good. That if all men

FREE TRADE AND SOCIALISM. 305

were assigned proper employment and all wealth fairly
distributed, then none would need employment and there
would be no injustice in distribution, is as indisputable a
proposition as that if all were good none would be bad.
But it will not help a man perplexed as to his path to tell
him that the way to get to his journey's end is to get
there.

That all men should be good is the greatest desidera-
tum, but it can be secured only by the abolition of con-
ditions which tempt some and drive others into evil-doing.
That each should render according to his abilities and
receive according to his needs, is indeed the very highest
social state of which we can conceive, but how shall we
hope to attain such perfection until we can first find
some way of securing to every man the opportunity to
labor and the fair earnings of his labor? Shall we try to
be generous before we have learned how to be just?

All schemes for securing equality in the conditions of
men by placing the distribution of wealth in the hands of
government have the fatal defect of beginning at the
wrong end. They presuppose pure government ; but it
is not government that makes society ; it is society that
makes government ; and until there is something like sub-
stantial equality in the distribution of wealth, we cannot
expect pure government.

But to put all men on a footing of substantial equality,
so that there could be no dearth of employment, no " over-
production/' no tendency of wages to the minimum of
subsistence, no monstrous fortunes on the one side and
no army of proletarians on the other, it is not necessary
that the state should assume the ownership of all the
means of production and become the general employer
and universal exchanger; it is necessary only that the
equal rights of all to that primary means of production
which is the source all other means of production are

306 PROTECTION OE PEEE TRADE!

derived from, should be asserted. And this, so far from
involving an extension of governmental functions and
machinery, involves, as we have seen, their great reduc-
tion. It would thus tend to purify government in two
ways first, by the betterment of the social conditions on
which purity in government depends, and second, by the
simplification of administration. This step taken, and
we could safely begin to add to the functions of the state
in its proper or cooperative sphere.

There is in reality no conflict between labor and capi-
tal;* the true conflict is between labor and monopoly.
That a rich employer " squeezes" needy workmen may be
true. But does this squeezing power result from his
riches or from their need ? No matter how rich an em-
ployer might be, how would it be possible for him to
squeeze workmen who could make a good living for
themselves without going into his employment? The
competition of workmen with workmen for employment,
which is the real cause that enables, and even in most
cases forces, the employer to squeeze his workmen, arises
from the fact that men, debarred of the natural opportu-
nities to employ themselves, are compelled to bid against
one another for the wages of an employer. Abolish the
monopoly that forbids men to employ themselves, and
capital could not possibly oppress labor. In no case could
the capitalist obtain labor for less than the laborer could

* The great source of confusion in regard to such matters arise*
from the failure to attach any definite meaning to terms. It must
always be remembered that nothing that can be classed either as
labor or as land can be accounted capital in any definite use of the
term, and that much that we commonly speak of as capital such as
solvent debts, government bonds, etc. is in reality not even wealth
which all true capital must be. For a fuller elucidation of this,
as of similar points, I must refer the reader to my " Progress and
Poverty."

FREE TRADE AND SOCIALISM. 307

get by employing himself. Once remove the cause of
that injustice which deprives the laborer of the capital his
toil creates, and the sharp distinction between capitalist
and laborer would, in fact, cease to exist.

They who, seeing how men are forced by competition
to the extreme of human wretchedness, jump to the con-
clusion that competition should be abolished, are like
those who, seeing a house burn down, would prohibit the
use of fire.

The air we breathe exerts upon every square inch of
our bodies a pressure of fifteen pounds. Were this pres-
sure exerted only on one side, it would pin us to the
ground and crush us to a jelly. But being exerted on
all sides, we move under it with perfect freedom. It not
only does not inconvenience us, but it serves such
indispensable purposes that, relieved of its pressure, we
should die.

So it is with competition. Where there exists a class
denied all right to the element necessary to life and
labor, competition is one-sided, and as population in-
creases must press the lowest class into virtual slavery,
and even starvation. But where the natural rights of
all are secured, then competition, acting on every hand
between employers as between employed; between
buyers as between sellers can injure no one. On the
contrary it becomes the most simple, most extensive,
most elastic, and most refined system of cooperation,
that, in the present stage of social development, and in
the domain where it will freely act, we can rely on for
the coordination of industry and the economizing of
social forces.

In short, competition plays just such a part in the
social organism as those vital impulses which are beneath
consciousness do in the bodily organism. With it, as
with them, it is only necessary that it should be free.

308 PROTECTION OR FREE TRADE t

The line at which the state should come in is that where
free competition becomes impossible a line analogous
to that which in the individual organism separates the
conscious from the unconscious functions. There is
such aline, though extreme socialists and extreme individ-
ualists both ignore it. The extreme individualist is like
the man who would have his hunger provide him food ;
the extreme socialist is like the man who would have his
conscious will direct his stomach how to digest it.

Individualism and socialism are in truth not antago-
nistic but correlative. Where the domain of the one
principle ends that of the other begins. And although
the motto Laissezfaire has been taken as the watchword
of an individualism that tends to anarchism, and so-called
free traders have made " the law of supply and demand n
a stench in the nostrils of men alive to social injustice,
there is in free trade nothing that conflicts with a
rational socialism. On the contrary, we have but to
carry out the free-trade principle to its logical conclu-
sions to see that it brings us to such socialism.

The free-trade principle is, as we have seen, the prin-
ciple of free production it requires not merely the
abolition of protective tariffs, but the removal of all
restrictions upon production.

Within recent years a class of restrictions on produc-
tion, imposed by concentrations and combinations which
have for their purpose the limiting of production and
the increase of prices, have begun to make themselves
felt and to assume greater and greater importance.

This power of combinations to restrict production
arises in some cases from temporary monopolies granted
by our patent laws, which (being the premium that
society holds out to invention) have a compensatory
principle, however faulty they may be in method.

Such cases aside, this power of restricting production

FREE TRADE AND SOCIALISM. 309

is derived, in part, from tariff restrictions. Thus the
American steel-makers who have recently limited their
production, and put up the price of rails 40 per cent, at
one stroke, are enabled to do this only by the heavy duty
on imported rails. They are able, by combination, to
put up the price of steel rails to the point at which they
could be imported plus the duty, but no further. Hence,
with the abolition of the duty this power would be gone.
To prevent the play of competition, a combination of the
steel-workers of the whole world would then be neces-
sary, and this is practically impossible.

In other part, this restrictive power arises from ability
to monopolize natural advantages. This would be
destroyed if the taxation of land values made it unprofi-
table to hold land without using it. In still other part,
it arises from the control of businesses which in their
nature do not admit of competition, such as those of
railway, telegraph, gas and other similar companies.

I read in the daily papers that half a dozen representa^
tives of the " anthracite coal interest " met last evening
(March 24, 1886), in an office in New York. Their con-
ference, interrupted only by a collation, lasted till three
o'clock in the morning. When they separated they had
come to "an understanding among gentlemen" to
restrict the production of anthracite coal and advance its
price.

Now how comes it that half a dozen men, sitting
around some bottles of champagne and a box of cigars in
a New York office, can by an "understanding among
gentlemen" compel Pennsylvania miners to stand idle,
and advance the price of coal along the whole eastern
seaboard? The power thus exercised is derived in
various parts from three sources.

1. From the protective duty on coal. Free trade
would abolish that.

310 PROTECTION OR TREE TRADE!

2. From the power to monopolize land, which enables
them to prevent others from using coal deposits which
they will not use themselves. True free trade, as we
have seen, would abolish that.

3. From the control of railways, and the consequent
power of fixing rates and making discriminations in
transportation.

The power of fixing rates of transportation, and in this
way of discriminating against persons and places, is a
power essentially of the same nature as that exercised by
governments in levying import duties. And the prin-
ciple of free trade as clearly requires the removal of such
restrictions as it requires the removal of import duties.
But here we reach a point where positive action on the
part of government is needed. Except as between ter-
minal or " competitive " points where two or more roads
meet (and as to these the tendency is, by combination or
" pooling," to do away with competition), the carrying of
goods and passengers by rail, like the business of tele-
graph, telephone, gas, water or similar companies, is in
its nature a monopoly. To prevent restrictions and dis-
criminations, governmental control is therefore required.
Such control is not only not inconsistent with the free-
trade principle ; it follows from it, just as the interfer-
ence of government to prevent and punish assaults upon
persons and property follows from the principle of indi-
vidual liberty. Thus, if we carry free trade to its logical
conclusions we are inevitably led to what monopolists, who
wish to be " let alone n to plunder the public, denounce as
" socialism," and which is, indeed, socialism, in the sense
that it recognizes the true domain of social functions.

Whether businesses in their nature monopolies should
be regulated by law or should be carried on by the com-
munity, is a question of method. It seems to me, how-
ever, that experience goes to show that better results can
be secured, with less risk of governmental corruption, by

FREE TRADE AND SOCIALISM. 311

state management than by state regulation. But the
great simplification of government which would result
from the abolition of the present complex and demora-
lizing modes of taxation would vastly increase the ease
and safety with which either of these methods could be
applied. The assumption by the state of all those social
functions in which competition will not operate would
involve nothing like the strain upon governmental
powers, and would be nothing like as provocative of
corruption and dishonesty, as our present method of col-
lecting taxes. The more equal distribution of wealth
that would ensue from the reform which thus simplified
government, would, moreover, increase public intelli-
gence and purify public morals, and enable us to bring a
higher standard of honesty and ability to the manage-
ment of public affairs. We have no right to assume that
men would be as grasping and dishonest in a social state
where the poorest could get an abundant living as they
are in the present social state, where the fear of poverty
begets insane greed.

There is another way, moreover, in which true free
trade tends strongly to socialism, in the highest and best
sense of the term. The taking for the use of the com-
munity of that value of privilege which attaches to the
possession of land, would, wherever social development
has advanced beyond a certain stage, yield revenues even
larger than those now raised by taxation, while there
would be an enormous reduction in public expenses con-
sequent, directly and indirectly, upon the abolition of
present modes of taxation. Thus would be provided a
fund, increasing steadily with social growth, that could
be applied to social purposes now neglected. And
among the purposes which will suggest themselves to the
reader by which the surplus income of the community
could be used to increase the sum of human knowledge,
the diffusion of elevating tastes, and the gratification of

312 PROTECTION OR FREE TRADE f

healthy desires, there is none more worthy than that of
making honorable provision for those deprived of their
natural protectors, or through no fault of their own
incapacitated for the struggle of life.

We should think it sin and shame if a great steamer,
dashing across the ocean, were not brought to a stop by
a signal of distress from the meanest smack ; at the sight
of an infant lashed to a spar, the mighty ship would
round to, and men would spring to launch a boat in
angry seas. Thus strongly does the bond of our com-
mon humanity appeal to us when we get beyond the hum
of civilized life. And yet a miner is entombed alive, a
painter falls from a scaffold, a brakeman is crushed in
coupling cars, a merchant fails, falls ill and dies, and
organized society leaves widow and children to bitter
want or degrading alms. This ought not to be. Citizen-
ship in a civilized community ought of itself to be insur-
ance against such a fate. And having in mind that the
income which the community ought to obtain from the
land to which the growth of the community gives value
is in reality not a tax but the proceeds of a just rent, an
English Democrat (William Saunders, M.P.) puts in this
phrase the aim of true free trade : " No taxes at all, and
a pension to everybody."

This is denounced as " the rankest socialism " by those
whose notion of the fitness of things is, that the descen-
dants of royal favorites and blue-blooded thieves should be
kept in luxurious idleness all their lives long, by pensions
wrung from struggling industry, while the laborer and his
wife, worn out by hard work, for which they have received
scarce living wages, are degraded by a parish dole, or
separated from each other in a "work-house."

If this is socialism, then, indeed, is it true that free
trade leads to socialism.

CHAPTER XXIX.

PRACTICAL POLITICS.

ON a railway train I once fell in with a Pittsburgh
brass band that was returning from a celebration.
The leader and I shared the same seat, and between the
tunes with which they beguiled the night, we got into a
talk which, from politics, touched the tariff. I neither
expressed my own opinions nor disputed his, but asked
him some questions as to how protection benefited labor.
His answers seemed hardly to satisfy himself, and sud-
denly he said :

"Look here, stranger, may I ask you a question? I
mean no offense, but I'd like to ask you a straightfor-
ward question. Are you a free trader ? *

"lam."

"A real free trader one that wants to abolish the
tariff?"

" Yes, a real free trader. I would have trade between
the United States and the rest of the world as free as it
is between Pennsylvania and Ohio."

" Give me your hand, stranger," said the band-leader,
jumping up. " I like a man who's out and out."

"Boys," he exclaimed, turning to some of his bands-
men, " here's a sort of man you never saw ; here's a real
free trader, and he ain't ashamed to own it." And when
the "boys" had shaken hands with me, very much as

313

314 PROTECTION OB FREE TRADE!

they might have shaken hands with the " Living Skele-
ton" or the "Chinese Giant," "Do you know, stranger,"
the band-master continued, "I've been hearing of free
traders all my life, but you're the first I ever met. I've
seen men that other people called free traders, but when
it came their turn they always denied it. The most they
would admit was that they wanted to trim the tariff
down a little, or fix it up better. But they always
insisted we must have a tariff, and I'd got to believe that
there were no real free traders; that they were only a
sort of bugaboo."

My Pittsburgh friend was in this respect, I think, no
unfair sample of the great body of the American people
of this generation. The only free traders most of them
have seen and heard have been anxious to deny the
appellation or at least to insist that we always must
have a tariff, and to deprecate sudden reductions.

Is it any wonder that the fallacies of protection run
rampant when such is the only opposition they meetT
Dwarfed into mere revenue reform the harmony and
beauty of free trade are hidden ; its moral force is lost ;
its power to remedy social evils cannot be shown, and
the injustice and meanness of protection cannot be
arraigned. The "international law of God" becomes a
mere fiscal question which appeals only to the intellect
and not to the heart, to the pocket and not to the con-
science, and on which it is impossible to arouse the
enthusiasm that is alone capable of contending with
powerful interests. When it is conceded that custom-
houses must be maintained and import duties levied, the
average man will conclude that these duties might as
well be protective, or at least will trouble himself little
about them. When told that they must beware of
moving too quickly, people are not likely to move at all.

Such advocacy is not of the sort that can compel dis-

PRACTICAL POLITICS. 315

cussion, awaken thought, and press forward a great
cause against powerful opposition. Half a truth is not
half so strong as a whole truth, and to minimize such a
principle as that of free trade in the hope of disarming
opposition, is to lessen its power of securing support in
far greater degree than to lessen the antagonism it must
encounter. A principle that in its purity will be grasped
by the popular mind loses its power when befogged by
concessions and enervated by compromises.

But the mistake which such advocates of free trade
make has a deeper root than any misapprehension as to
policy. They are, for the most part, men who derive
their ideas from the emasculated and incoherent political
economy taught in our colleges, or from political tradi-
tions of " States' rights" and "strict construction " now
broken and weak. They do not present free trade in its
beauty and strength because they do not so see it. They
have not the courage of conviction, because they have
not the conviction. They have opinions, but these
opinions lack that burning, that compelling force that
springs from a vital conviction. They see the absurdity
and waste of protection, and the illogical character of
the pleas made for it, and these things offend their sense
of fitness and truth ; but they do not see that free trade
really means the emancipation of labor, the abolition of
poverty, the restoring to the disinherited of their birth-
right. Such free traders are well represented by jour-
nals which mildly oppose protection when no election is
on, but which at election-times are as quiet as mice.
They are in favor of what they call free trade, as a cer-
tain class of good people are in favor of the conversion
of the Jews. When entirely convenient they will speak,
write, attend a meeting, eat a dinner or give a little money
for the cause, but they will hardly break with their party
or " throw away n a vote.

316 PROTECTION OR FREE TRADE!

Even the most energetic and public-spirited of these
men are at a fatal disadvantage when it comes to a
popular propaganda. They can well enough point out
the abuses of protection and expose its more transparent
sophistries, but they cannot explain the social phenomena
in which protection finds its real strength. All they can
promise the laborer is that production shall be increased
and many commodities cheapened. But how can this
appeal to men who are accustomed to look upon " over-
production " as the cause of wide-spread distress, and who
are constantly told that the cheapness of commodities is
the reason why thousands have to suffer for the want of
them 1 And when confronted by the failure of revenue
reform to eradicate pauperism and abolish starvation
when asked why in spite of the adoption in Great Britain
of the measures he proposes, wages there are so low and
poverty so dire, the free trader of this type can make no
answer that will satisfy the questioner, even if he can
give one satisfactory to himself. The only answer his
philosophy can give the only answer he can obtain
from the political economy taught by the "free-trade"
text-booksis that the bitter struggle for existence
which crushes men into pauperism and starvation is of
the nature of things. And whether he attributes this
nature of things to the conscious volition of an intelli-
gent Creator or to the working of blind forces, the man
who either definitely or vaguely accepts this answer is
incapable of feeling himself or of calling forth in others
the spirit of Cobden's appeal to Bright.

Thus it is that free trade, narrowed to a mere fiscal
reform, can appeal only to the lower and weaker motives
to motives that are inadequate to move men in masses.
Take the current free-trade literature. Its aim is to
show the impolicy of protection, rather than its injus-
tice $ its appeal is to the pocket, not to the sympathiea

PEACTICAL POLITICS. 317

Yet to begin and maintain great popular movements it is
the moral sense rather than the intellect that must be
appealed to, sympathy rather than self-interest. For
however it may be with any individual, the sense of
justice is with the masses of men keener and truer than
intellectual perception, and unless a question can assume
the form of right and wrong it cannot provoke general
discussion and excite the many to action. And while
material gain or loss impresses us less vividly the
greater the number of those we share it with, the power
of sympathy increases as it spreads from man to man-
becomes cumulative and contagious.

But he who follows the principle of free trade to its
logical conclusion can strike at the very root of protec-
tion ; can answer every question and meet every objec-
tion, and appeal to the surest of instincts and the strong-
est of motives. He will see in free trade not a mere
fiscal reform, but a movement which has for its aim and
end nothing less than the abolition of poverty, and of
the vice and crime and degradation that flow from it, by
the restoration to the disinherited of their natural rights
and the establishment of society upon the basis of
justice. He will catch the inspiration of a cause great
enough to live for and to die for, and be moved by an
enthusiasm that he can evoke in others.

It is true that to advocate free trade in its fullness
would excite the opposition of interests far stronger than
those concerned in maintaining protective tariffs. But
on the other hand it would bring to the standard of free
trade, forces without which it cannot succeed. And
what those who would arouse thought have to fear is
not so much opposition as indifference. Without opposi-
tion that attention cannot be excited, that energy evoked,
that are necessary to overcome the inertia that is the
strongest bulwark of existing abuses. A party can no

318 PROTECTION OR FREE TRADE!

more be rallied on a question that no one disputes than
steam can be raised to working pressure in an open vessel.

The working-class of the United States, who have con-
stituted the voting strength of protection, are now ready
for a movement that will appeal to them on behalf of
real free trade. For some years past educative agencier
have been at work among them that have sapped theii
faith in protection. If they have not learned that pro-
tection cannot help them, they have at least become
widely conscious that protection does not help them.
They have been awakening to the fact that there is some
deep wrong in the constitution of society, although they
may not see clearly what that wrong is ; they have been
gradually coming to feel that to emancipate labor radical
measures are needed, although they may not know what
those measures are.

And scattered through the great body thus beginning
to stir and grope are a rapidly increasing number of mez:
who do know what this primary wrong is men who se
that in the recognition of the equal right of all to the
element necessary to life and labor is the hope, and tH
only hope, of curing social injustice.

It is to men of this kind that I would particularly
speak. They are the leaven which has in it power to
leaven the whole lump.

To abolish private property in land is an undertaking
so great that it may at first seem impracticable.

But this seeming impracticability consists merely in
the fact that the public mind is not yet sufficiently awak-
ened to the justice and necessity of this great change.
To bring it about is simply a work of arousing thought.
How men vote is something we need not much concern
ourselves with. The important thing is how they think.

Now the chief agency in promoting thought is discus-
sion. And to secure the most general and most effective

PEACTICAL POLITICS. 319

discussion of a principle it must be embodied in concrete
form and presented in practical politics, so that men,
being called to vote on it, shall be forced to think and
talk about it.

The advocates of a great principle should know no
thought of compromise. They should proclaim it in its
fullness, and point to its complete attainment as their
goal. But the zeal of the propagandist needs to be sup-
plemented by the skill of the politician. While the one
need not fear to arouse opposition, the other should seek
to minimize resistance. The political art, like the mili-
tary art, consists in massing the greatest force against
the point of least resistance; and, to bring a principle
most quickly and effectively into practical politics, the
measure which presents it should be so moderate as
(while involving the principle) to secure the largest sup-
port and excite the least resistance. For whether the
first step be long or short is of little consequence. When
a start is once made in a right direction, progress is a
mere matter of keeping on.

It is in this way that great questions always enter the
phase of political action. Important political battles
begin with affairs of outposts, in themselves of little
moment, and are generally decided upon issue joined not
on the main question, but on some minor or collateral
question. Thus the slavery question in the United
States came into practical politics upon the issue of the
extension of slavery to new territory, and was decisively
settled upon the issue of secession. Regarded as an end,
the abolitionist might well have looked with contempt on
the proposals of the Republicans, but these proposals
were the means of bringing to realization what the aboli-
tionists would in vain have sought to accomplish directly.

So with the tariff question. Whether we have a pro-
tective tariff or a revenue tariff is in itself of small

320 PROTECTION OB FREE TRADE?

importance, for, though the abolition of protection
would increase production, the tendency to unequal dis-
tribution would be unaffected and would soon neutralize
the gain. Yet, what is thus unimportant as an end, is
all-important as a means. Protection is a little robber,
it is true ; but it is the sentinel and outpost of the great
robber the little robber who cannot be routed without
carrying the struggle into the very stronghold of the
great robber. The great robber is so well intrenched,
and people have so long been used to his exactions, that
it is hard to arouse them to assail him directly. But to
help those engaged in a conflict with this little robber
will be to open the easiest way to attack his master, and
to arouse a spirit that must push on.

To secure to all the free use of the power to labor and
the full enjoyment of its products, equal rights to land
must be secured.

To secure equal rights to land there is in this stage of
civilization but one way. Such measures as peasant
proprietary, or "land limitation/' or the reservation to
actual settlers of what is left of the public domain, do
not tend toward it 5 they lead away from it. They can
affect only a comparatively unimportant class, and that
temporarily, while their outcome is not to weaken land-
ownership but rather to strengthen it, by interesting a
larger number in its maintenance. The only way to
abolish private property in land is by the way of taxa-
tion. That way is clear and straightforward. It con-
sists simply in abolishing, one aftei another, all imposts
that are in their nature really taxes, and resorting for
public revenues to economic rent, or ground value. To
the full freeing of land, and the complete emancipation
of labor, it is, of course, necessary that the whole of this
value should be taken for the common benefit ; but that
will inevitably follow the decision to collect from this

PRACTICAL POLITICS. 321

source the revenues now needed, or even any consider-
able part of them, just as the entrance of a victorious
army into a city follows the rout of the army that
defended it.

In the United States the most direct way of moving
on property in land is through local taxation, since that
is already to some extent levied upon land values. And
that is doubtless the way in which the final and decisive
advance will be made. But national politics dominate
State politics, and a question can be brought into discus-
sion much more quickly and thoroughly as a national
than as a local question.

Now to bring an issue into politics it is not necessary
to form a party. Parties are not to be manufactured;
they grow out of existing parties by the bringing for-
ward of issues upon which men will divide. We have,
ready to our hand, in the tariff question, a means of
bringing the whole subject of taxation, and, through it,
the whole social question, into the fullest discussion.

As we have seen in the inquiry through which we have
passed, the tariff question necessarily opens the whole
social question. Any discussion of it to-day must go
further and deeper than the Anti-Corn-Law agitation in
Great Britain, or than the tariff controversies of Whigs
and Democrats, for the progress of thought and the
march of invention have made the distribution of wealth
the burning question of our times. The making of the
tariff question a national political issue must now mean
the discussion in every newspaper, on every stump, and
at every cross-roads where two men meet, of questions of
work and wages, of capital and labor, of the incidence of
taxation, of the nature and rights of property, and of the
question to which all these questions lead the question
of the relation of men to the planet on which they live.
In this way more can be accomplished for popular eco-

322 PROTECTION OB FREE TRADE!

nomic education in a year than could otherwise be
accomplished in decades.

Therefore it is that I would urge earnest men who aim
at the emancipation of labor and the establishment of
social justice, to throw themselves into the free-trade
movement with might and main, and to force the tariff
question to the front. It is not merely that the free-
trade side of the tariff controversy best consorts with the
interests of labor ; it is not merely that until working-men
get over thinking of labor as a poor thing that needs to be
" protected," and of work as a dole from gracious capi-
talists or paternal governments, they cannot rise to a
sense of their rights; but it is that the movement for
free trade is in reality the van of the struggle for the
emancipation of labor. This is the way the lull must go to
untwist his rope. It makes no difference how timorously
the issue against protection is now presented ; it is still
the thin end of the wedge. It makes no difference how
little we can hope at once to do; social progress is by
steps, and the step to which we should address ourselves
is always the next step *

* There is no reason why at least the bulk of the revenues needed
for the national government under our system should not be collected
from a percentage on land values, leaving the rest for the local
governments, just as State, county and municipal taxes are collected
on one assessment and by one set of officials. On the contrary there
is, over and above the economy that would thus be secured, a strong
reason for the collection of national revenues from land values in
the fact that the ground values of great cities and mineral deposits
are due to the general growth of population.

But the total abolition of the tariff need not await any such adjust-
ment. The issuance of paper money, a function belonging properly
to the General Government, would, properly used, yield a consider-
able income ; while independent sources of any needed amount of
revenue could be found in various taxes, which though not eco-
nomically perfect, as is the tax on land values, are yet much less
objectionable than taxes on imports. The excise tax on spirituous

PRACTICAL POLITICS. 323

Nor does it matter that those now active in the free-
trade movement have no sympathy with our aims ; nor
that they denounce and misrepresent us. It is our
policy to support them, and strengthen them, and urge
them on. No matter how soon they may propose to
stop, the direction they wish to take is the direction in
which we must go if we would reach our goal. In
joining our forces to theirs, we shall not be putting our-
selves to their use, we shall be making use of them.

But these men themselves, when fairly started and
borne on by the impulse of controversy, will go further
than they now dream. It is the law of all such move-
ments that they must become more and more radical.
And while we are especially fortunate in the United
States in a class of protectionist leaders who will not
yield an inch until forced to, our political conditions differ

liquors ought to be abolished, as it fosters corruption, injuriously
affects many branches of manufacture and puts a premium on adul*
teration ; but either by a government monopoly, or by license taxes
vn retail sales, a large revenue might be derived from the liquor traffio
with much greater advantage to public health and morals than by
the present system. There are also some stamp taxes which are
comparatively uninjurious and can be collected easily and cheaply.

But of all methods of raising an independent Federal revenue,
that which would yield the largest return with the greatest ease and
least injury is a tax upon legacies and successions. In a large popu-
lation the proportion of deaths is as regular as that of births, and
with proper exemptions in favor of widows, minor children and
dependent relatives, such a tax would bear harshly on no one, and
from the publicity which must attach to the transfer of property by
death or in view of death it is easily collected and little liable to
evasion. The appropriation of land values would of itself strike at
the heart of overgrown fortunes, but until that is accomplished, a
tax of this kind would have the incidental advantage of interfering
with their transmission.

Of all excuses for the continuance of any tariff at all, the most
groundless is that it is necessary to secure Federal revenues. Even
the income tax, bad as it is, is in all respects better than a tariff.

324 PROTECTION OB FREE TRADE f

from those of Great Britain in 1846, when, the laboring-
class being debarred from political power, a timely sur-
render on the part of the defenders of protection checked
for a while the natural course of the movement, and thus
prevented the demand for the abolition of protection from
becoming at once a demand for the abolition of landlord-
ism. The class that in Great Britain is only coming into
political power has, with us, political power already.

Yet even in Great Britain the inevitable tendencies of
the free-trade movement may clearly be seen. Not only
has the abolition of protection cleared the ground for the
far greater questions now beginning to enter British
politics ; not only has the impulse of the free-trade agita-
tion led to reforms which are placing political power in
the hands of the many j but the work done by men who,
having begun by opposing protection, were not content
to stop with its abolition, has been one of the most
telling factors in hastening the revolution now in its
incipient stages a revolution that cannot stop short of
the restoration to the British people of their natural
rights to their native land.

Richard Gobden saw that the agitation of the tariff
question must ultimately pass into the agitation of the
land question, and from what I have heard of him I am
inclined to think that were he in life and vigor to-day, he
would be leading in the movement for the restoration to
the British people of their natural rights in their native
land. But, however this may be, the British free-trade
movement left a "remnant" who, like Thomas Briggs,*

* Author of "Property and Taxation," etc., and a warm supporter
of the movement for the restoration of their land to the British
people. Mr. Briggs was one of the Manchester manufacturers active
in the Anti-Corn-Law movement, and, regarding that victory as a
mere beginning, has always insisted that Great Britain was yet under
the blight of protectionism, and that the struggle for true free trade
was yet to come.

PRACTICAL POLITICS. 325

have constantly advocated the carrying of free trade to
its final conclusions. And one of the most effective of
the revolutionary agencies now at work in Great Britain
is the Liverpool Financial Reform Association, whose
Financial Reform Almanac and other publications are
doing so much to make the British people acquainted
with the process of usurpation and spoliation by which
the land of Great Britain has been made the private
property of a class, and British labor saddled with the
support of a horde of aristocratic paupers. Yet the
Liverpool Financial Reform Association is composed of
men who, for the most part, would shrink from any
deliberate attack upon property in land. They are
simply free traders of the Manchester school, logical
enough to see that free trade means the abolition of
revenue tariffs as well as of protective tariffs. But in
striking at indirect taxation they are of necessity dealing
tremendous blows at private property in land, and sap-
ping the very foundations of aristocracy, since, in show-
ing the history of indirect taxation, they are showing
how the tenants of the nation's land made themselves
virtual owners ; and in proposing the restoration of the
direct tax upon land values they are making an issue
which will involve the complete restoration of British
land to the British people.

Thus it is that when men take up the principle of
freedom they are led on and on, and that the hearty
advocacy of freedom to trade becomes at length the
advocacy of freedom to labor. And so must it be in the
United States. Once the tariff question becomes a
national issue, and in the struggle against protection,
free traders will be forced to attack indirect taxation.
Protection is so well intrenched that before a revenue
tariff can be secured the active spirits of the free-trade
party will have far passed the point when that would
satisfy them; while before the abolition of indirect taxa-

326 PROTECTION OB FREE TRADE!

tion is reached, the incidence of taxation and the nature
and effect of private property in land will have been so
well discussed that the rest will be but a matter of time.
Property in land is as indefensible as property in man.
It is so absurdly impolitic, so outrageously unjust, so
flagrantly subversive of the true right of property, that
it can only be instituted by force and maintained by con-
founding in the popular mind the distinction between
property in land and property in things that are the
result of labor. Once that distinction is made clear
and a thorough discussion of the tariff question must
now make it clear and private property in land is
doomed.

CHAPTER XXX.

CONCLUSION.

A WEALTHY citizen whom I once supported, and
called on others to support, for the Presidential
chair, under the impression that he was a Democrat of
the school of Jefferson, has recently published a letter
advising us to steel-plate our coasts, lest foreign navies
come over and bombard us. This counsel of timidity has
for its hardly disguised object the inducing of such an
enormous expenditure of public money as will prevent
any demand for the reduction of taxation, and thus
secure to the tariff rings a longer lease of plunder. It
well illustrates the essential meanness of the protection-
ist spirit a spirit that no more comprehends the true
dignity of the American Republic and the grandeur of
her possibilities than it cares for the material interests of
the great masses of her citizens "the poor people who
have to work."

That which is good harmonizes with all things good ;
and that which is evil tends to other evil things.
Properly does Buckle, in his "History of Civilization,"
apply the term " protective n not merely to the system of
robbery by tariffs, but to the spirit that teaches that the
many are born to serve and the few to rule ; that props
thrones with bayonets, substitutes small vanities and
petty jealousies for high-minded patriotism, and converts

327

328 PROTECTION OR FREE TRADE f

the flower of European youth into uniformed slaves,
trained to kill each other at the word of command. It
is not accidental that Mr. Tilden, anxious to get rid of
the surplus revenue in order to prevent a demand for
the repeal of protective duties, should propose wasting it
on steel-clad forts, rather than applying it to any pur-
pose of general utility. Fortifications and navies and
standing armies not merely suit the protectionist purpose
in requiring a constant expenditure, and developing a
class who look on warlike expenditures as conducive to
their own profit and importance, but they are of a piece
with a theory that teaches us that our interests are
antagonistic to those of other nations.

Unembarrassed by hostile neighbors; unentangled in
European quarrels; already, in her sixty millions of
people, the most powerful nation on earth, and rapidly
rising to a position that will dwarf the greatest empires,
the American Republic can afford to laugh to scorn any
suggestion that she should ape the armaments of Old-
World monarchies, as she should laugh to scorn the
parallel suggestion that her industries could be ruined by
throwing open her ports to the commerce of the world.

The giant of the nations does not depend for her
safety upon steel-clad fortresses and armor-plated ships
which the march of invention must within a few years
make, even in war-time, mere useless rubbish ; but in her
population, in her wealth, in the intelligence and inven-
tiveness and spirit of her people, she has all that would
be really useful in time of need. No nation on earth
would venture wantonly to attack her, and none could do
so with impunity. If we ever again have a foreign war
it will be of our own making. And too strong to fear
aggression, we ought to be too just to commit it.

In throwing open our ports to the commerce of the
world we shall far better secure their safety than by

CONCLUSION. 329

fortifying them with all the " protected " plates that our
steel ring could make. For not merely would free trade
give us agam that mastery of the ocean which protection
has deprived us of, and stimulate the productive power
in which real fighting strength lies 5 but while steel-clad
forts could afford no defense against the dynamite-drop-
ping balloons and death-dealing air-ships which will be
the next product of destructive invention, free trade
would prevent their ever being sent against us. The
spirit of protectionism, which is the real thing that it is
sought to defend by steel-plating, is that of national
enmity and strife. The spirit of free trade is that of
fraternity and peace.

A nobler career is open to the American Republic
than the servile imitation of European follies and vices.
Instead of following in what is mean and low, she may
lead toward what is grand and high. This league of
sovereign States, settling their differences by a common
tribunal and opposing no impediments to trade and
travel, has in it possibilities of giving to the world a
more than Roman peace.

What are the real, substantial advantages of this
Union of ours? Are they not summed up in the abso-
lute freedom of trade which it secures, and the commu-
nity of interests that grows out of this freedom ? If our
States were fighting each other with hostile tariffs, and a
citizen could not cross a State boundary-line without
having his baggage searched, or a book printed in New
York could not be sent across the river to Jersey City
without being held in the post-office until duty was paid,
how long would our Union last, or what would it be
worth? The true benefits of our Union, the true basis
of the interstate peace it secures, is that it has pre.
vented the establishment of State tariffs and given us
free trade over the better part of a continent.

330 PROTECTION OB FREE TRADE!

We may "extend the area of freedom whenever we
choose to whenever we apply to our intercourse with
other nations the same principle that we apply to inter-
course between our States. We may annex Canada to all
intents and purposes whenever we throw down the tariff
wall we have built around ourselves. We need not ask
for any reciprocity ; if we abolish our custom-houses and
call off our baggage searchers and Bible eonfiscators,
Canada would not and could not maintain hers. This
would make the two countries practically one. Whether
the Canadians chose to maintain a separate Parliament
and pay a British lordling for keeping up a mock court
at Rideau Hall, need not in the slightest concern us.
The intimate relations that would come of unrestricted
commerce would soon obliterate the boundary-line ; and
mutual interest and mutual convenience would speedily
induce the extension over both countries of the same
general laws and institutions.

And so would it be with our kindred over the sea.
With the abolition of our custom-houses and the opening
of our ports to the free entry of all good things, the
trade between the British Islands and the United States
would become so immense, the intercourse so intimate,
that we should become one people, and would inevitably
so conform currency and postal system and general laws
that Englishman and American would feel themselves as
much citizens of a common country as do New Yorker
and Californian. Three thousand miles of water are no
more of an impediment to this than are three thousand
miles of land. And with relations so close, ties of blood
and language would assert their power, and mutual
interest, general convenience and fraternal feeling might
soon lead to a pact, which, in the words of our own,
would unite all the English-speaking peoples in a league
"to establish justice, insure domestic tranquillity, provide

CONCLUSION. 331

for the common defense, promote the general welfare,
and secure the blessings of liberty."

Thus would free trade unite what a century ago pro-
tectionism severed, and in a federation of the nations of
English speech the world-tongue of the future take
the first step to a federation of mankind.

And upon our relations with all other nations our
repudiation of protection would have a similar tendency.
The sending of delegations to ask the trade of our sister
republics of Spanish America avails nothing so long as
we maintain a tariff which repels their trade. We have
but to open our ports to draw their trade to us and avail
ourselves of all their natural advantages. And more
potent than anything else would be the moral influence
of our action. The spectacle of a continental republic
such as ours really putting her faith in the principle of
freedom, would revolutionize the civilized world.

For, as I have shown, that violation of natural rights
which imposes tariff duties is inseparably linked with
that violation of natural rights which compels the masses
to pay tribute for the privilege of living. The one can-
not be abolished without the other. And a republic
wherein the free-trade principle was thus carried to its
conclusion, wherein the equal and unalienable rights of
men were thus acknowledged, would indeed be as a city
set on a hill.

The dangers to the Republic come not from without
but from within. What menaces her safety is no
armada launched from European shores, but the gather-
ing cloud of tramps in her own highways. That Krupp
is casting monstrous cannon, and that in Cherbourg and
Woolwich projectiles of unheard-of destructiveness are
being stored, need not alarm her, but there is black omen
in the fact that Pennsylvania miners are working for 65
cents a day. No triumphant invader can tread our soil

332 PROTECTION OB FREE TRADE!

till the blight of "great estates" has brought "failure of
the crop of menj" if there be danger that our cities
blaze, it is from torches lit in faction fight, not from
foreign shells.

Against such dangers forts will not guard us, iron-
clads protect us, or standing armies prove of any avail.
They are not to be avoided by any aping of European
protectionism ; they come from our failure to be true to
that spirit of liberty which was invoked at the formation
of the Republic. They are only to be avoided by con-
forming our institutions to the principle of freedom.

For it is true, as was declared by the first National
Assembly of France, that "ignorance, neglect, or contempt
of human rights are the sole causes of public misfortunes
and corruptions of government."

Here is the conclusion of the whole matter : That we
should do unto others as we would have them do to us
that we should respect the rights of others as scrupu-
lously as we would have our own rights respected, is not
a mere counsel of perfection to individuals, but it is the
law to which we must conform social institutions and
national policy if we would secure the blessings of abun-
dance and peace.

INDEX.

American Republic, possibilities
of, 328.

Balance of trade. 112.

origin of the idea, 123.
Bounties. 82, 89, 97, 100.
Briggs, Thomas, 324.
Bright, John, 277.
Buckle, 327.

Capital, not the oppressor of
labor, 275 ; no conflict between
capital and labor, 306; con-
fusions in regard to, 306.

Carey, H. C., 9, 79.

Coal and iron monopolies, 178,
309.

Cobden, Richard, 274, 324.

Cobden Club, opposed to true
free trade, 14.

Competition, functions and ef-
fects, 306.

Concentration, causes of ten-
dency to, 165.

Cobperative stores, 67.

Copyright, international, 205.

De Tpcqueville, 189.
Distribution, effects of increased

production on, 256.
Drawbacks, 84.

Duties, export and import, corn-
English estates in America, 119,

275.
Evarts, William M., 131.

Exchange, international, gov-
erned by comparative cost of
production, 147.

Export duties, objections to, 116.

Exports, due to other things
than exchange, 117.

"Fair traders," 149.

Fortification of our coasts, 328.

Fourier, Charles, 64.

Free trade, a general interest, 12;
not a British invention, 13;
natural trade, 14; British, 14;
in the United States. 15 ; in Ire-
land, 17; in the United States,
causes which have prejudiced
working-men against, 18, 224,
230; and socialism, 300; inade-
quacy of the usual argument for,
224, 230; movement in Eng-
land, 233, 291, 324; true, 277;
why its advocacy has been so
halting, 291 ; means peace, 328.

Greeley, Horace, 56, 63, 93, 94,

109, 147, 176, 177, 206.
Gronlund, Laurence, 303.

Hoyt, Henry M., 242.
Hyndman, H. M., 303.

Import duties, fall on consumers.

71; claim that they are paid

by foreigners, 85.
Imports, in a profitable trade

should exceed exports, 116 ; do

not always imply exports, 117.

333

334

INDEX.

Individualism; 303.

Interest, rate of, as reason for

protection, 144.
Invention, effects of labor-saving,

263.
Ireland, tariffs and industry of, 17 ;

American remittances to, 118.
Iron, effect of the duty on, 150,

177.

Labor, efficiency varies with
wages, 138 ; value the measure
of embodied, 109, 137; relative
not absolute cost of, determines
exchanges, 147 ; the true stan-
dard of value, 198; not pro-
tected by tariffs, 204; condi-
tions becoming harder, 230,
258; of itself helpless, 247;
cause of its impoverishment,
267.

Laborer, full meaning of the
term, 68.

Land, value of, increases as wages
fall, 142; effects of private
ownership of, 165, 172, 267;
the passive factor in produc-
tion, 173; monopoly of timber
and mineral lands, 171 ; influ-
ence of price of, on wages, 213 ;
monopoly of, gives control of
labor, 259, 276; value of, 272;
how equal rights to, t may be
asserted, 278; necessity of se-
cure possession, 279.

Landowner, not a producer, 173.

Machinery, effects of, 253.

Malthus, 9.

Manufactures, natural develop-
ment of, 153; localization of,
158; large demand necessary
to, 160.

Marx, Karl, 303.

Middlemen, 64.

Mill, John Stuart, 9, 86.

Mining royalties, 177.

Money, confusions arising from
use of, 123; fluctuations in the
value of, 198.

Navigation Laws, effects of, 193.

Octroi, 64.
Over-production, 232.

Physiocrats, 14, 289, 291.

Political economy, simplicity of;
8; method of, 25; mercantile
system of, 128.

Production, what it embraces,
60 ; cost of. not determined by
wages, 137; advantages for,
14; factors of, 172; increase
of, does not benefit all, 232.

Property in land, 165, 173, 267,
326; how instituted in Great
Britain, 293.

Protection, reasserting itself in
Great Britain, 3, 103, 149 ; ends
praiseworthy, 5; general ac-
ceptance, 11; influences it en-
lists, 12 ; not American, 13, 42 ;
in the case of Ireland, 17;
causes that dispose working-
men in its favor, 19, 242 ; its
spirit that of enmity, 13, 32,
327 ; its corrupting tendencies,
34, 76, 91; what it prevents,
45; a world suited to, 52; its
genesis, 69, 75, 128; is boy-
cotting of ourselves, 105, 150;
its real beneficiaries, 166; ef-
fect on prices, 87; effect on
profits, 87, 166; effect upon
other countries, 150; effect on
land values, 174; first asked
for the establishment of new
industries, 94; difference be-
tween protectionist writers and
popular pleas, 98; derives
strength from confusions of
thought arising from the use
of money, 128; effects on
American industry, 181; in-
jurious to the development of
manufactures, 153, 166, 181;
tends to unjust distribution,
238 ; home-market argument,
103; balance -of -trade argu-
ment, 112; high-wages argu-
ment, 135; arguments drawn
from advantages or disadvan-
tages, 144; abolition of, would
stimulate industry, 180, 217;

INDEX.

335

plea for gradual abolition, 217;
effect on wages, 230 ; cannot be
abolished in the United States
on the same lines as in Great
Britain, 233; and wages, 195:
cannot protect labor, 202 ; real
strength of, 242 ; how it makes
work, 243; cannot check con-
centrating tendencies, 265 ;
strengthened by opponents,
252; its relation to monopoly
of land, 320.

Protective theory, if true, then
universally true, 28; opposed
to natural perceptions and im-
pulses, 36, 59; arbitrary and
shifting character of the pro-
tective unit, 37 ; inconsistencies
of, 37, 92; applies to smaller
even more than to larger di-
visions, 40; cannot be put in
practice, 90.

Public debts, 220.

Quesnay, 14, 291.

Revenue, Federal, possible

sources of, 322.
Bogers, Prof. Thorold, 239.

Sailors, character of, 189.

Savages, their rude methods due
to isolation, 161.

Scully, William, American es-
tates of, 119.

Shipping, American, 186.

Slavery, two forms of, 270; in-
fluence of American, on public
opinion. 295.

Smith, Adam, 8, 14. 89, 106, 291.

Smith, E. P., 79.

Socialism, relations of free trade
to, 300.

Spencer, Herbert, 281.

Sumner, Prof. W. G., 250.

Tariff question, its importance,
3 ; not safely to be left to spe-
cialists, 6 ; not recondite, 7 ; not
yet thoroughly discussed, 7;
cannot be understood without

going further, 9, 224: paradox
to which it leads, 253.

Tariffs, origin of, 69 ; first Amer-
ican, 15; are restrictions, not
on foreigners, but on the peo-
ple that impose them, 45, 150 ;
for revenue, 69 ; for protection,
80; frequent modifications of,
170 ; Act of 1883, typical blun-
der in, 91.

Taxation, indirect, a farming of
revenue, 76.

Taxes, direct and indirect, con-
sidered, 70 ; on ostentation, 287 ;
on land values, 287; Federal,
323.

Thompson, Prof. R. E., 37, 56,
63, 79, 98, 131, 190, 243.

Tobacco and cigars, taxes on, 70.

Trade, nature and function of,
45; a mode of production, 197.

Trades-unions, influence on com-
petition, 201, 209; can do little,

Value, the measure of embodied
labor, 109, 137.

Wages, a high standard of, a
proper concernment of the
state, 5 ; assumption that they
are higher in the United States
because of tariff, 23 ; not the de-
termining factor in cost of pro-
duction, 137 ; rate of, as related
to land values, 142, 209 ; effect of
protection on, 195 ; tendency to
a common level, 199 ; governed
by competition in labor-mar-
ket, not in goods-market, 199 ;
do not increase with employers'
profits, 207; in widest occupa-
tions, determine general rate
of, 211; effects of abolition of
protection on, 230.

Wealth, increase of, does not
benefit all classes, 231.

Wells, D. A., 168.

Work, treated by protectionists
as an end, 243 ; now this feeling
arises, 247.